Sebi imposes Rs 75-cr fine on 22 promoter entities of Marg Ltd for open offer lapses

Capital markets regulator Sebi on Monday imposed penalties totalling Rs 75 crore on 22 promoter group and related entities of Marg Ltd for lapses relating to a mandatory open offer triggered by certain creeping acquisition of shares.

In two separate orders, Sebi imposed a penalty of Rs 25 lakh on Akshya Infrastructure Private Limited and of Rs 74.75 crore on 22 entities including Akshya Infrastructure, an entity forming part of Marg Ltd's promoter group.

A voluntary open offer was made by Akshya Infrastructure through a public announcement in October 2011 to acquire 20 per cent of the equity shares of Marg Ltd, and a draft offer was filed with Sebi through its merchant bankers.

However, Sebi noted that certain acquisitions were made by the promoter group of the target company during the financial years 2006-07, 2007-08 and 2010-11, and these acquisitions resulted in breach of 5 per cent creeping acquisition limit in a financial year under Sebi's substantial acquisition of shares and takeover regulations.

The promoter group was required to make public announcement on the respective dates during 2006-07, 2007-08 and 2010-11 financial years, as per these regulations.

Sebi, however, found that 22 promoters, as also the acquirer Akshya Infra, failed to make open offer public announcements on the respective dates during the three financial years.

The promoter entities are G R K Reddy, GRV Reddy Sons HUF, Global Infoserv, Marg Capital Markets, Marg Holdings & Financial Services, (currently known as Marg Projects and Infrastructure Ltd), Raghunatha Reddy SV, Nagaraja Reddy SV, Chandra Reddy E, Subhash Reddy Y, Revanth S, Hymavathi S, Laxmi E, Manjula Y, Mallikarjuna Rao G, Parvathi Devi G, Surendranathan Reddy N, Madhavi N, Srinivajulu G, V P Rajini Reddy, Madhusudan Reddy Gorepatti, and Exemplarr Worldwide Ltd.

One promoter G Raghava Reddy has since died.

Following issuance of show-cause notices, some of these noticees filed for a settlement, but those pleas were rejected later.

After fresh deliberations, Sebi has now imposed a fine of Rs 74.75 crore on the 22 entities and reserved its right to take appropriate action for non-compliance of an earlier order passed in November 2019.

Separately, Sebi has also imposed a penalty of Rs 25 lakh on Akshya Infrastructure.