Markets regulator Sebi today imposed a penalty of Rs 20 lakh on Maharashtra Polybutenes for making wrong disclosure about promoters' shareholding to the stock exchange.
In an order, Sebi said that despite the actual steep reduction in the promoter shareholding, the company had made incorrect and inflated disclosures to the BSE for four consecutive quarters (December 2008, March 2009, June 2009 and September 2009).
Therefore, by reporting information which was not true in its disclosures, the firm has violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.
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"General public were made to believe through repeated wrong disclosures continuously for four quarters to BSE that there was no change in the shareholding of the promoters whereas the shareholding of promoter group has come down drastically," Sebi noted.
Besides, the regulator noted that Maharashtra Polybutenes did not make disclosure with respect to change in shareholding pattern in the prescribed format.
The regulator said that instead of making disclosure in 'Form C', it made the disclosure in 'Form D' which is not consistent with Sebi's regulation as this form did not contain necessary details such as PAN number, percentage of voting rights held by the promoter, mode of acquisition, number of shares/voting rights post acquisition/sale and sell value as required.
The regulator said that the disclosure was incomplete in terms of the prescribed regulations. Hence, it has to be treated as a case of 'no disclosure'
By indulging in such activities, it has violated the provision of PIT (Prohibition of Insider Trading) Regulations.
In the same case, Sebi has levied a fine of Rs 5 lakh on New Era Advisors for disclosure lapses.
The shareholding of New Era Advisors, one of the promoters of Maharashtra Polybutenes, reduced from 16.04 per cent to 12.19 per cent but it failed to make timely disclosures about it.
"By failure to make necessary and timely disclosures, the investors were deprived of the correct information to make their investment decisions. Therefore, the noticee has violated ...PIT Regulations," Sebi said in a separate order.
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