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2015 (12) TMI 1246 - AT - Companies LawPenalty imposed on under section 15A(b) of SEBI Act for failing to make annual disclosures under Regulation 8(3) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997 (‘Takeover Regulations, 1997’ for short) during the financial years ended March 31, 2002 to 31st March, 2011 - Held that:- Every listed company has to make yearly disclosures to the stock exchanges disclosing the shares held by the persons/promoters set out under Regulations 8(1) and 8(2) as on the last day of the financial year including the change in the shareholding, if any, compared to the shareholding on the last day of the previous financial year. In other words whether there is any change in the shareholding or not, the listed company is obliged to make disclosures under Regulation 8(3) and cannot avoid such obligation on ground that there is no change in the shareholding of the persons/promoters set out under Regulations 8(1) and 8(2) of Takeover Regulations, 1997. Various alternative contentions raised by the appellant for the delay in making disclosures under Regulations 8(3) as also various mitigating factors pointed out on behalf of the appellant do not exonerate the appellant from the obligation to make disclosures under Regulation 8(3), because the obligation under Regulation 8(3) is mandatory and the company failing to discharge that obligation is statutorily liable to pay penalty under section 15A(b) of SEBI Act. The penalty imposable under section 15A(b) of the SEBI Act for violating Regulation 8(3) at the relevant time was Rs. One Lakh for each day during which such failure continues or One Crore rupees whichever is less. In the present case, penalty imposable for failure to make yearly disclosures for the financial years ended March 31, 2002 to March 31, 2011 at the rate of Rs. One Lakh per day would run into several crores of rupees. However, after taking into consideration all the mitigating factors set out under Section 15J of SEBI Act, the Adjudicating Officer of SEBI has imposed penalty of ₹ 5 Lakh which cannot be said to be unreasonable or excessively harsh.
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