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The Securities Appellate Tribunal today upheld Sebi's order that had asked Nakoda Ltd promoters to make public announcement to acquire additional shares.
It also upheld Sebi directive that asked them to pay 10% interest, along with the consideration amount, to those who held the shares during the period when the promoter entities were hiking their stakes in Nakoda.
The 12 promoter entities of Nakoda including P B Jain Investment and Nakoda Syntex had failed to make the public announcement to buy additional shares of the firm after their collective stake rose from 26.38% to 44.03%.
Following Securities and Exchange Board of India' (Sebi) order in July asking the promoters to make a combined public announcement to buy the shares, the entities had approached SAT challenging the market regulator's ruling in the case.
Sebi had said: "It is also directed to pay interest at rate of 10% per annum from March 13, 2012 to the date of payment to the shareholders who were holding shares in the target company on the date of the said violation and whose shares have been accepted in the offer, after adjustment of dividends if any."
In its order today, SAT said that "the findings by the learned whole time member (of Sebi) in the impugned order are absolutely correct and are hereby upheld".
Among others, SAT observed that the promoters of Nakoda had incurred an obligation to make a combined open offer to acquire shares of Nakoda as per law.
In its probe, the Securities and Exchange Board of India (Sebi) had observed that following an allotment of 5.4 crore shares to P B Jain Investment and Nakoda Syntex on December 19, 2011, the collective stake of the promoters increased from 26.38% to 44.03%.
Further, the collective voting rights of the promoters rose from 50.23% to 62.92%.
As per norms, since such increase in shareholding/voting rights was more than the permissible creeping limit of 5% in a fiscal year, the promoters were obliged to make a public announcement.
In a separate order dated November 12, SAT has revoked Sebi's order that barred six entities from dealing in the capital market way back in 2009.
Sebi in an interim order issued in April 2009 had restrained Sai Krupa Trading Co, Navratan S Jain, Meet Corporation, Ashish Mahawar, Maulik Diamonds and Dilkhush Babel from buying, selling or dealing in securities market including initial public offerings, until further orders.
However, SAT noted that following the order, the market regulator had not taken any further steps in the case.
Sebi in its submissions to SAT stated that in several group cases SAT has vacated similar ex-parte ad-interim order with liberty to the market regulator to proceed with the matter, if they so desired.
"Accordingly for reasons stated in the aforesaid order restraint imposed upon appellants by the impugned ex-parte ad-interim order dated April 23, 2009 is hereby vacated with liberty to the respondent (Sebi) to pass such final order as it deems fit on ex-parte ad-interim order all dated April 23, 2009," said the SAT order.
