Mumbai: SEBI has disposed of a case against Citigroup Global Markets Mauritius for allegedly not making requisite disclosure regarding its share purchase in Cairn India.
In its show cause notice, SEBI had alleged Citigroup Global of purchasing 15.03 crore shares (amounting to 7.87 percent stake) of Cairn India which triggered the obligation for the foreign fund house to make disclosures to the concerned stock exchanges.
Securities and Exchange Board of India (SEBI) in an order on June 24, said that alleged violations of norms by Citigroup Global Markets Mauritius as specified in the show cause notice "do not stand and the matter is accordingly disposed off".
According to the order, it has been clarified that on September 25, 2012, trading member Citigroup Global Markets India Pvt Ltd had purchased 15,03,35,047 shares of Cairn India for Citigroup Global Markets Mauritius Pvt Ltd.
Subsequently, Citigroup Global Markets India allocated 3,90,28,000 shares to Citigroup Global Markets Mauritius.
"Thus the actual acquisition by Citigroup Global Markets Mauritius Pvt Ltd was of only 3,90,28,000 shares which was approximately 2.04 percent of the equity share capital of Cairn India," the order said.
It also observed that disclosure requirements "are triggered when there has been acquisition of shares or voting rights in a company which brings the aggregate holding of an acquirer to more than 5 percent or more shares or voting rights of that company".
The regulator said shares received by Citigroup Global Markets Mauritius constituted only 2.04 percent stake in the company and hence were not in violation of any norm.
SEBI had conducted a probe into the dealings in shares of Cairn India from May 1, 2012 to October 31, 2012.
First Published: Tuesday, June 25, 2013, 19:22