Sebi Wednesday slapped a fine of Rs 2 crore on former promoter and managing director of Filatex Fashions, Prabhat Setia, and two others for failing to make an open offer under takeover regulations as directed earlier by the regulator.
In an order, Sebi said the penalty is imposed on Prabhat Setia, Sangeeta Sethia and Swaminathan Rajendran.
Currently, Prabhat is company secretary and compliance officer of the firm, while Sangeeta is a non-independent woman director and Swaminathan was an accountant at the time of violation.
The case pertains to year 2007 when Sangeeta and Swaminathan had acquired 3 lakh shares of the firm.
The regulator found that Prabhat, Sangeeta, wife of promoter Prabhat, and Swaminathan, were persons acting in concert (PAC) in respect of acquisition of shares under the SAST (Substantial Acquisition of Shares and Takeovers) norms.
Due to the acquisition of shares, the promoters' holding increased by 5.8 per cent to 35.73 per cent, the increase in the holding mandated public announcement, the regulator said.
Accordingly, Sebi in 2013 ordered the three entities to make an open offer and pay 12 per cent interest to the investors on the offer price.
Challenging the order, the three appealed to SAT (Securities Appellate Tribunal) that dismissed their appeal in 2014 and again, a review application was filed, which was also dismissed by SAT in 2015.
With the dismissal, the open offer order stood revived and the entities were bound to comply the 2013 order, Sebi said.
However, the earlier order has been defied and disobeyed, the regulator said in a fresh order.
The brazen defiance shown by the entities towards enforcement directions cannot be viewed lightly, the Securities and Exchange Board of India (Sebi) said and thereby imposed a fine of Rs 2 crore to be paid jointly and severally by them.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.