SAT upholds Sebi's order in Vitro case; reduces fine
Mumbai: The Securities Appellate Tribunal (SAT) on Wednesday upheld Sebi's order against Vitro Commodities in a case related to not making requisite disclosures at every stage regarding its share acquisition, but has reduced the penalty imposed on the company to Rs 1 lakh from Rs 10 lakh.
Upholding Sebi's order passed in March this year, the Tribunal said "it is adequate to impose a token penalty of Rs 1 lakh on appellant (Vitro Commodities) for technical and inadvertent violation of...Takeover Regulations, 1997 and PIT (Prohibition of Insider Trading)Regulations, 1992".
In March this year, Sebi had slapped a total penalty of Rs 10 lakh on Vitro Commodities for allegedly not making requisite and timely disclosures at every stage regarding its acquisition of 5.36 per cent stake in GEE Ltd shares.
Of the Rs 10 lakh penalty, the regulator had slapped a fine of Rs 5 lakh on Vitro Commodities for not disclosing at every stage the aggregate of his shareholding in GEE (which had crossed 5 per cent), to the company and the concerned stock exchange.
Another Rs 5 lakh was imposed for not making the disclosures within two days of the transactions as required under the norms.
Sebi had conducted an investigation into the trading in the scrip of GEE during the period April 28, 2009 to August 31, 2009.
It was alleged on the basis of the findings of the probe that till March 2009, Vitro Commodities was not appearing as a promoter entity. However, it was holding 5.36 per cent of shares in the quarter ending March 2009.
Thereafter, Vitro Commodities had approached the SAT challenging Sebi's order.
SAT noted that provisions of Takeover Regulations, 1997 and PIT Regulations, 1992 are "not substantially different, since violation of first automatically triggers violation of second and hence there is no justification for imposition of penalty for second violation when penalty for first violation has been imposed. "
These norms are not stand alone regulations and one is corollary of other, it added.
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