Markets regulator Sebi has imposed a total penalty of Rs 9 lakh on a former promoter and two former directors of DMC International for disclosure lapses.
According to a Sebi order dated July 31, Shark Communications was the promoter of DMC at the the time of the lapse. Sham Sunder Gupta was the managing director and compliance officer of the firm and Saroj Gupta was non-independent director.
The ruling came following an investigation conducted by the Securities and Exchange Board of India (Sebi) in the shares of of DMC International (now known as DMC Education) from April to September 2010.
The regulator had observed that during April and May 2010, the shareholding of Shark Communications had increased from 13.27 to 14.18 per cent.
Under SAST (Substantial Acquisition of Shares and Takeovers) Regulations, Shark Communications was required to disclose the increased shareholding to DMC International and the BSE.
However, Shark Communications failed to do so and violated the SAST norms, Sebi said and imposed a fine of Rs 2 lakh on it.
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During the investigation period, Sham Sunder Gupta's shareholding had changed by over 25,000 shares on ten occasions. Under PIT (Prohibition of Insider Trading) Regulations, being a director Sham Sunder was obliged to disclose the change in his shareholding to the firm and the BSE.
For his failure to make the disclosure, Sebi imposed a fine of Rs 2 lakh on him.
Besides, the regulator also noted that it is the responsibility on the compliance officer under the overall supervision of the Board of Directors for implementation of code of conduct for prevention of insider trading.
"Therefore, I hold the Board of Directors (non-independent) viz, Sham Sunder Gupta (compliance officer and MD) and Saroj Gupta (non-independent director) liable for the lapses in implementation of code of conduct for prevention of insider trading," Sebi adjudicating officer B J Dilip said.
Accordingly, the regulator slapped an additional penalty of Rs 4 lakh on Sham Sunder and Rs 1 lakh on Saroj.
In a separate order, Sebi imposed a fine of Rs 5 lakh on Kiran Vinod Shah for his failure to submit the required information sought by the regulator with regard to the alleged irregularities in the initial public offer of Ravi Kumar Distilleries Ltd.