Sebi imposes Rs 5 lakh fine on 4 entities for delayed open offer

NEW DELHI: Market regulator Sebi has imposed a fine of Rs 5 lakh on four entities, including one individual, for delay in making an open offer to shareholders of Himachal Fibres.

The case relates to a Sebi probe into the alleged irregularities in the shares of Himachal Fibres and other possible violations of regulatory nature.

Among those fined are Mayank Malhotra, Brijeshwari Textiles, Shiva Spinfab and Balmukhi Textiles.

Himachal Fibres had collectively made a preferential allotment of 40 lakh shares, or 46.37 per cent stake, in the company to the four entities, who were part of the promoter group in 2012. The move had triggered an open offer.

Since the acquisition of shares was more than the threshold prescribed under the Takeover Regulations, 2011, they were liable to make a public announcement on March 15, 2012, the date on which the Special Resolution was passed.

This public announcement needs to be made by the acquirers to make the open offer, primarily disclosing their intention to acquire the shares of the target company from the existing shareholders, giving an exit opportunity to the public shareholders.

They had failed to make a public announcement in respect of the open offer and directly made the detailed public statement on June 4, 2012 to acquire up to 22.42 lakh shares, or 26 per cent, in the company, said the regulator.

These entities have admitted that they failed to make the public announcement, and hence the delay.

"I am, therefore, of the view that noticees collectively had committed the default by failing to make a public announcement in respect of the open offer made by them under the provisions of the SAST (Substantial Acquisition of Shares and Takeovers) Regulations," Sebi's Adjudicating Officer Suresh B Menon said in his order dated August 31.