Business Daily from THE HINDU group of publications
Thursday, Feb 28, 2008
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Thursday, Feb 28, 2008 ePaper | Mobile/PDA Version |
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Corporate
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Preferential Allotments Markets - Regulatory Bodies & Rulings
Our Bureau Mumbai, Feb. 27 The Securities and Exchange Board of India has imposed a fine of Rs 25 lakh on the promoters of Strides Arcolabs Ltd (SAL) for violating the SEBI takeover regulations, while raising their equity stake in the company. The SEBI order passed by its adjudicating officer, Mr V.S. Sundaresan, on Wednesday, directed Mr Arun Kumar, Mr K.R. Ravishankar, Arcolab (India) Pvt Ltd, and Caryl Pharma to pay the fine amount in 45 days. According to the SEBI investigation, the promoters of the company had raised their stake in the company from 11.25 per cent to 19.31 per cent though an issue of preferential allotment of 30,68,875 warrants, which were later converted into shares. However, the promoters did not make a public announcement while raising their holding above 15 per cent which they are required to as per the provisions of SEBI’s Substantial Acquisition of Shares and Takeover (SAST) regulations. SEBI has overruled the promoters’ contention that conversion of warrants into equity shares is merely a ‘legal consequence’ and not a fresh acquisition. According to the regulator, by exercising the option of conversion of warrants into shares, the promoters attracted the provisions of the SAST regulation and, hence, needed to make a public announcement as the promoters” shareholding crossed the 15 per cent limit in the company. The company’s share price closed the day at Rs 159.90 on the BSE against the previous close of Rs 159.50. More Stories on : Preferential Allotments | Regulatory Bodies & Rulings | Pharmaceuticals
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