Sebi imposes Rs 5 lakh penalty on Rotomac Global

Tags: Stock Market
Market regulator Sebi today imposed a penalty of Rs five lakh on Rotomac Global for allegedly failing to make a public announcement regarding its stake buy in Flawless Diamonds India Ltd (FDIL).

Sebi had found that Rotomac Global had acquired 40 lakh shares representing 24 per cent stake in FDIL from four entities on October 30 and 31, 2009, but failed to make a public announcement.

"...It is established beyond doubt that the noticee (Rotomac Global) acquired 40 lakh shares i.E. 24 per cent shareholding/voting rights of the FDIL, from aforesaid four entities on October 30 and 31, 2009 and did not make the public announcement..." Sebi said in its order.

As per Sebi norms, no entity can acquire shares which entitle it to exercise 15 per cent or more of the voting rights in a company, unless it makes a public announcement to the company within four working days of the transaction.

Rotomac Global had acquired the shares from Abhishek Jain, Jalak Jain, Manmohan Gems and Sethia Gems.

Sebi also found that the shares so acquired by Rotomac Global were transferred back to these four entities between December 2009 and March 2010.

The entity had informed the regulator that the purchase was made through a pledge agreement with the transferors and it did not acquire voting rights as the said shares were under pledge to it.

It said the shares were pledged for the purpose of providing margin towards its trading in option and futures market and, therefore, it is not liable to make any public announcement.

However, Sebi observed: "The pledgee cannot further transfer/sale the shares unless the pledge is invoked...In the present case, the mandatory procedure for pledge was not followed and apparently by virtue of being not a valid pledge, the shares were further transferred by the noticee to the same entities as is evident from the Demat statements."

EDITORIAL OF THE DAY

  • Annual reports make sense only if accountable governance is in place

    It’s a sign of a lack of imagination to expect an annual report by a party in power to pull out some impressive performance given the complex nature

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Amita Sharma

Political rhetoric makes for counter poetry

Poetic flourishes flavour politics. Ghalib and Hafez flowed profusely to ...

Zehra Naqvi

Watch your words, for they can kill

You must’ve heard the ph­rase ‘if looks could kill’. Ever ...

Dharmendra Khandal

Biodiversity day has come and gone. Yet again

Every year on May 22, world celebrates international biodiversity day. ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture