INDIA: Securities Appellate Tribunal upholds SEBI decision on India major shareholdings breaches by Tropical

Thursday April 4 2013

The Securities Appellate Tribunal (SAT) has upheld the SEBI order against Tropical Securities & Investments for failing to make the requisite India major shareholdings disclosures related to its purchase of Prudential Pharmaceuticals shares under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011. However, the SAT did reduce the penalty imposed on Tropical to Rs 1 lakh.

SAT said in an order issued on Tuesday that it did not find any legal infirmity in the order passed by market regulator Sebi and upheld the decision.

It also noted that Tropical has ceased to carry on the business of broker since 2001 after suffering huge losses as claimed by it, and for that reason the Tribunal decided that a penalty of Rs 1 lakh would meet the ends of justice. The penalty initially imposed by SEBI was Rs 2.50 lakh.

Tropical was required in law to make the disclosure of the aggregate of shareholding/voting rights in Prudential Pharma to the company as well as to the stock exchanges where the shares of the target company were listed  within four working days of acquiring such number of shares/voting rights, which Tropical did not do.

A probe by Sebi had found that Tropical had acquired a 13.59% stake in Prudential, from March 5, 2001 to July 6, 2001.

Click on the above link for the decision.