The Hindu Business Line : SEBI slaps fine on Burren Energy, Unocal Bharat

Market regulator SEBI has slapped an adjudication penalty of Rs 25 lakh each on Burren Energy India Ltd (BEIL) and Unocal Bharat Ltd (UBL) on alleged charges of violation of SEBI Acquisition of Shares and Takeovers Regulations.

BEIL had entered into a share purchase agreement with Unocal International Corporation (UIC) to acquire 100 per cent equity in UBL, a wholly owned subsidiary of UIC. In consideration to this deal, UBL was allowed to keep 1,52,81,633 shares of Hindustan Oil Exploration Co Ltd (HOEL), constituting 26.01 per cent of its equity.

During the course of filing the Letter of Offer, it was allegedly found that UBL had replaced two of its nominees on the board of HOEL with two directors of the UBL board. This is alleged to be in contrary to the SEBI Takeover Regulations.

"If a person nominated by the acquirer is allowed to be appointed on the board of the target company (here HOEL) during the pendency of the public offer, he will be more concerned about the interests of the acquirer, rather than keeping and protecting the interests of existing shareholders," said Mr Amit Pradhan, Adjudicating Officer, in his order.

The penalty is intended to pass on a message that any disregard of laws of the land will not be tolerated and on takeover matters which are sensitive with respect to the interest of minority shareholders, the regulator will not let anybody take them casually, the order said.

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SEBI slaps fine on Burren Energy, Unocal Bharat