Markets regulator Sebi has imposed a penalty of Rs 25 lakh on Alka India for failing to redress investor complaints following the merger of Janice Textiles with itself.
The complaints were filed by two shareholders of Janice Textiles, alleging that they did not receive shares of Alka India post amalgamation of the companies.
"I impose a penalty of Rs 25,00,000... For non-redressal of complaints," Sebi General Manager and Adjudicating Officer B J Dilip said in an order against the firm yesterday.
In the 23-page order, Securities and Exchange Board of India (Sebi) noted that Alka India failed to take any steps to redress the main grievance of non-receipt of shares.
"However, clarification regarding the status of amalgamation was sent to complainants in the SCORES after one year and eight months on October 28-29, 2015.
"It cannot be considered as redressal of complaint but merely an information which facilities to take informed decision," the order noted.
The complaints were filed on SCORES -- the online redressal platform -- in February 2014.
The regulator said the contention of Alka India that redressal of complaints of non-receipt of shares in exchange of scheme of amalgamation of Janice Textiles was beyond the control of the company "is not acceptable", as the firm failed to meet the various regulatory compliances laid down by BSE.
Janice Textiles was delisted on September 20, 2015 and apart from the complainants, there are 430 investors of Janice Textiles who have also not received amalgamated shares till date, as admitted by Alka India, Sebi said.
Currently, since Janice Textiles is delisted, there is no recourse available for these investors to sell the company's shares on the stock exchange platform as on today, the order added.
"Thus the interest of investors of Janice Textiles as well as the noticee (Alka India) are gravely affected due to non-allotment of shares pursuant to scheme of amalgamation," it added.
Sebi norms require all listed companies to take action on investor complaints within 30 days of receiving them.
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