TMI Blog2017 (5) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 2,50,000/- imposed on appellant is set aside and restored to the file of learned AO for hearing this aspect afresh and deciding it as per law after giving an opportunity of hearing to the appellant in respect of the allegation under the SAST Regulations, 1997 read with those of 2011. Accordingly, the impugned order is upheld to the extent of imposition of two penalties of ₹ 2,00,000/- each for violation of Sections 11C(3) and (5) of the SEBI Act, 1992 whereas the penalty of ₹ 2,50,000/- under SAST Regulations, 1997 is set aside and the matter is remanded to the learned AO for a fresh look as directed hereinabove. The appellant is directed to deposit the penalty of ₹ 4,00,000/- within a period of four weeks from today failing which the respondent shall be at liberty to initiate appropriate proceedings to recovery of the said amount as per law. - Misc. Application No. 121 of 2016, AND Appeal No. 177 of 2016 - - - Dated:- 2-3-2017 - J. P. Devadhar, Jog Singh And Dr. C. K. G. Nair, JJ. For The Appellant : Ms. Rinku Valanju, Advocate with Ms. Nikita Hinger, Advocate For The Respondent : Mr. Aditya Chitale, Advocate with Mr. Pulkit Sukhramani, Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of 1997 and 2011 read with Regulation 13(1) of Prohibition of Insider Trading Regulations, 1992, we would like to reproduce the relevant provisions herein below for the sake of convenience :- Violation of provisions of regulations 7(1) and 7(1A) read with regulation 7(2) of SAST Regulations, 1997 and regulation 13(1) of PIT Regulations, 1992 SAST Regulations, 1997 Acquisition of 5 per cent and more shares or voting rights of a company 7(1) Any acquirer, who acquires shares or voting rights which (taken together with shares or voting rights, if any, held by him) would entitle him to more than five per cent or ten per cent or fourteen per cent or fifty four per cent or seventy four per cent shares or voting rights in a company, in any manner whatsoever, shall disclose at every stage the aggregate of his shareholding or voting rights in that company to the company and to the stock exchanges where shares of the target company are listed. (1A) Any acquirer who has acquired shares or voting rights of a company under sub-regulation (1) of regulation 11 or under second proviso to sub-regulation (2) of regulation 11, shall disclose purchase or sale aggre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... convertible warrants, where full amount of consideration has been received by the company, may be converted into equal number of shares of ₹ 1/- each. Accordingly, on February 20, 2010, MIL made an allotment of 24,85,00,000 shares of ₹ 1/- each to the preferential allottees of the convertible equity warrants. Therefore, on February 20 2010, MIL had issued capital of 32,00,00,000 shares of ₹ 1/- each and outstanding convertible preferential warrants worth ₹ 5,15,00,000/- . 7. The details of the shares allotted to the appellant pursuant to conversion of equity warrants into equity shares of ₹ 1/- each by MIL on February 20, 2010 and its percentage to the issued capital of MIL as on that date was as under :- Name No. of shares allotted % of shares to the issued capital of the company (32,00,00,000 shares of ₹ 1/- each) Enakshi Impex Pvt. Ltd. 1,41,65,000 4.43 8. Pursuant to the aforesaid conversion of equity warrants into equity share of ₹ 1/- each by MIL on February 20, 2010, two other entities namely Gazala Construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cogent evidence to support the finding that the noticee i.e. appellant acted as a PAC with Narois within the meaning of Regulation 2(e)(2)(i) of SAST Regulations, 1997. It is noted that in paragraph 24 of the impugned order, learned AO has held that on February 20, 2010, the acquisition date, the appellant and Narois were under the same management as per sub-section (1B) of Section 370 of the Companies Act, 1956 and that Shri Karan Kapoor and Shri Ravindra Balekar, who were founders of the appellant company and Narois, by virtue of their common shareholding of 50% each in both these companies, were controlling both these companies on the date of acquisition i.e. February 20, 2010. Based on this observation, the learned AO had held in para 26 of the order that the appellant and Narois were under the same management on the date of acquisition of shares and hence the appellant was a deemed PAC with Narois under Regulation 2(e)(2)(i) of SAST Regulations, 1997 and that being the case, the shareholding of the appellant was to be taken alongwith that of Narois. Therefore, shareholding of the appellant when taken together with Narois shareholding entitled them to more than the threshold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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