Sebi disposes of case against Ethelbari Tea's 3 promoters
Apr 30 2014 , Mumbai
A show cause notice by Securities and Exchange Board of India had alleged that Chandra Prakash Kanoi, Santosh Kumar Kanoi and Nirmal Kumar Kanoi had acquired certain number of Ethelbari Tea Company's shares from their father but had failed to disclose the details to the bourses within the stipulated time.
In an order dated April 29, Sebi noted that the shares were "transmitted to the noticees from their late father by way of operation of law".
Further, it observed that the Companies Act distinguished "transmission of shares from transfer of shares. Execution of transfer deed is not required in case of transmission of shares.
"Further, while transfer of shares relates to a voluntary act on the part of the shareholder, tansmission is brought about by the operation of law".
Accordingly, Sebi said that it was inclined to take "a lenient view in the matter and thus conclude that transmission of shares, sans any voluntary act on the part of the promoters is not a fit case for imposition of monetary penalty".
The regulator noted that the did not find the "instant matter fit for imposition of penalty on the noticees (Chandra Prakash Kanoi, Santosh Kumar Kanoi and Nirmal Kumar Kanoi)... and the dispose of the proceeding accordingly".
Sebi had found that in a transaction on January 11, 2010, the promoters had acquired shares but made the disclosures on the same to the stock exchanges with a delay of 8 days from the transaction as against 2 days mandated under the norms.
In two separate orders, Sebi has disposed of the case against Drillco Metal Carbides but has imposed a penalty of Rs 50,000 on the company promoter La Tim Sourcing (India) in a matter related to violation of the disclosure norms.
The matter is with respect to acquisition of shares of Drillco Metal Carbides (now known as La Tim Metal & Industries) and the delay in filing disclosures with regard to the same by the firm and its promoter to the stock exchanges.
Sebi found that Drillco Metal Carbides had the disclosures "well within the time" specified under the regulations (that is within 2 days of the transaction). However, its promoter had delayed in making the disclosures by one day.
As per norms, every entity who holds 5 per cent or more stake in a company has to disclose every acquisition or disposal of shares of the firm representing 2 per cent or more of the shares or voting rights within two working days to the company and the relevant stock exchanges.