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2017 (7) TMI 373 - Tri - Companies LawAcquisition of the shares of the Petitioner Company, in violation of the Regulation 13 of the SEBI (Prohibition of Insider Trading) Regulation, 1992 - Prohibition of Insider Trading - Held that:- The term “person” in Regulation 13 of the SEBI Prohibition of Insider Trading Regulation, 1992 shall be construed to include a company as well and not only an individual. R1 being a company, to have acquired more than 5% shareholding in the Petitioner Company, is therefore liable to serve the declarations under the SEBI SAST Regulations, 1997 and SEBI Prohibition of Insider Trading Regulation, 1992 as well. However, R1 had failed to serve the declaration under the latter regulation which it had rectified after the Petitioner had filed the present company petition on the 19th July, 2004. The declaration so filed at a later point of time on 24th August, 2004, is in violation of the SEBI Prohibition of Insider Trading Regulation, 1992 and is not valid for the reason that the said declaration had to be filed within four working days of the receipt of intimation of allotment of shares or the acquisition of shares or voting rights, as the case may be, as per the SEBI Prohibition of Insider Trading Regulation, 1992. Thus it clearly indicates that R1 was in default for not having served the declaration under the SEBI Prohibition of Insider Trading Regulation, 1992, when its shareholding in the Company exceeded 5%. The present Company Petition is allowed. The Respondents having furnished the declaration at a later point of time are hereby barred from exercising their rights as to the shares acquired by them in the Petitioner Company in excess of 5%. The Company is hereby authorised to buyback the shares that the Respondents hold in excess of 5% of the shareholding in the Company at the rate which was prevailing on the date of presentation of the Petition or market value, whichever is higher. The Respondents are directed to hand over the share certificates and share transfer forms within 30 days of the order to the Company and in response to that the Petitioner will be liable to pay the buyback price which shall be the value of shares which was prevailing on the date of presentation of the petition or market value whichever is higher. It is clear that the power exercised by the Company Law Board and the powers exercised by the SEBI fall in different and distinct jurisdictional fields. Therefore, the present order shall not preclude the jurisdiction of SEBI as an adjudicating authority for deciding on the violation of SEBI Regulations as have been laid down in the present petition.
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