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Market regulator Sebi today slapped a fine of Rs 1 crore on Golden Tobacco Ltd as the company failed to provide correct details with respect to shares encumbered by the promoters and promoter group.
The Securities and Exchange Board of India (Sebi), in its order, has imposed "a consolidated penalty of Rs 1 crore on Golden Tobacco Ltd (GTL)for the violation of the Listing Agreement and...PFUTP (Prohibition of manipulative, fraudulent and unfair trade practices) Regulations."
Sebi, in July 2009 had restrained nine promoter entities of GTL from selling, transferring or creating third party interest in any manner in shares of the company.
According to the regulator, 32.93 lakh shares held by the promoter entities of GTL were encumbered, while quarterly disclosure made during March 2009 to June 2010 by the company stated that only 5.28 lakh shares were encumbered.
Therefore, Sebi said, "it is clear that 32.93 lakh shares of GTL were encumbered which needs to be disclosed or disseminated to the public at large under the Listing Agreement."
Sebi also observed that GTL by the act of omission and concealment of the vital information regarding encumbrance of around 80 per cent of shares held by promoters and promoter group of the company, has committed fraud on the investors as per PFUTP Regulation.
"Noticee (GTL)by its act of causing to publish information which was not true i.e. By providing incorrect number of encumbered shares has also violated...PFUTP Regulations," Sebi noted.
