SEBI headquarters
REUTERS/Shailesh Andrade

Markets regulator Sebi has imposed a total penalty of Rs 5,00,000 on four entities — IFCI Factors, Unicon Merchants, Akash Gupta and Preeti Gupta — for disclosure lapses in the matter of Shiva Cement.

SEBI found that these four entities had violated SAST (Substantial Acquisition of Shares and Takeovers) Regulation for the transactions dated April 21, 2014, in the shares of Shiva Cement. Shiva Cement's shares, which were released on April 21, 2014, had been pledged by the promoters.

IFCI Factors was the counter-party to the transactions and had acquired the shares. The promoters had pledged their shares with IFCI Factors and the same was released later which required them to make requisite disclosures, SEBI said in its order dated January 5. The market regulator added that upon release of the pledged shares, IFCI Factors was also required to make necessary disclosures.

Although, the four entities by not making the necessary disclosures upon release of the pledge of shares of Shiva Cements have violated the provisions of SAST Regulation, SEBI noted.

In order to conduct an inquiry into the matter, a personal hearing was granted to all the Noticees by the SEBI on November 28, 2017. The hearing notice was delivered to all the noticees and they had appeared for the hearing. After the process, SEBI concluded that the noticees failed to make the necessary disclosures as required under the SAST Regulation are liable for monetary penalties under the SEBI Act, 1992.

After considering all the facts and circumstances of the case and exercising the powers conferred upon me under Section 15-I (2) of the SEBI Act, 1992 SEBI has levied a fine of Rs 3,00,000 on the promoters and Rs 2,00,000 on IFCI Factors for the violations. The Noticees are required to remit the said amount of penalty within 45 days of receipt of SEBI's order.