Sebi imposes Rs 50-lakh fine on Tulive Developers, promoters

Market watchdog Sebi has imposed a penalty of Rs 50 lakh on Tulive Developers and its promoters for not adopting prescribed methods for complying with 25 per cent minimum public shareholding norms.
The Securities and Exchange Board of India (Sebi) has penalised the company and its two promoters -- Atul Gupta and K V Ramana.
The regulator found that these entities have not used the prescribed ways to bring down the shareholding of public shareholders in the company at a minimum level of 25 per cent.
The regulator had passed an interim order on June 4, 2013, against 105 listed companies which did not comply with the minimum public shareholding or MPS norms within the due date, that is June 3, 2013. Tulive Developers was one such firm against which the directions were issued.

Thereafter, while revoking the directions issued against the company and its promoters, Sebi in its final order in October 2014 had stated that it was not convinced with the reasons submitted by the company for not taking the stipulated route.
Hence, an adjudicating officer was specifically appointed to look into the matter.

Sebi found that Gupta had sold 2.97 per cent stake in the company to Rajshree Choudhary, through a synchronised deal executed between Gupta and Choudhary on the floor of the exchange.
It was further realised that Choudhary is/was one of the directors of stock broker, ASL Capital Holdings, and that these shares have been transferred subsequently to ASL.

Furthermore, Sebi said "noticees had apparently parked the shares with stock broker ASL/its directors and technically complied with the MPS norms, but, not in its true spirit".
"The non-adoption of the prescribed methods for complying with MPS norms... While technically complying with the letter of the law has to be viewed more seriously," Sebi said in an order dated August 31.
These entities, Sebi said, have failed to comply with clause the Listing Agreement and thus violated provisions of Securities Contracts Regulation Act.