Mumbai: Sebi on Tuesday disposed of the case against Sterling Holiday Resorts that alleged the leisure hospitality firm of delay in dematerialising certain pledged shares for Gujarat Industrial Investment Corporation (GIIC).
"...Though the noticee (Sterling Holiday) delayed the dematerialisation of shares, however, considering the amicable settlement between GIIC and the noticee and specific request by GIIC to Sebi...I am inclined to dispose of the matter without imposing penalty on the noticee," Securities and Exchange Board of India (Sebi) adjudicating officer Sandeep Deore said in the order.
"The noticee is, however, warned that it should refrain from repeating any such instances in future," he added.
GIIC had granted loan to Sterling Holiday Resorts in 1996 against 25.92 lakh shares pledged by the promoters of the leisure hospitality firm as a security.
However, as the company was unable to repay the debt, GIIC invoked the pledge as per the agreement and sought to transfer the pledged shares in its name.
It was found that even though Sterling Holiday Resorts transferred a few shares in the name of GIIC, it refused to dematerialise those shares.
Following a complaint by GIIC, the regulator in November 2009, passed an order directing Sterling Holiday Resorts to dematerialise the shares. Subsequent to which Sterling Holiday Resorts dematerialised nearly three lakh shares.
But since the company had delayed in dematerialising the shares it was liable for a monetary penalty, Sebi said.
The regulator observed that there was a delay on the part of Sterling Holiday in dematerialised the shares even after its the legal dispute with GIIC was over.
"...It was only after an order from Sebi that the noticee dematerialised the shares," Sebi noted.