Sebi imposes Rs 5L fine on former promoters of Comfort Fincap

Markets regulator Sebi has imposed a fine of Rs 5 lakh on former promoters of Comfort Fincap including Saraf Holdings for not making an open offer following the acquisition of additional stake in the firm.

Surface Holdings, Tower Properties, Aradhita Saraf, Sham Sunder Saraf (now deceased), Rama Devi Saraf, Sujata Saraf and Dev Saraf; were part of the erstwhile promoter group of Comfort Fincap.

Saraf Holdings had acquired 2,000 shares through off-market transactions constituting 0.27 per cent of the share capital of the Comfort Fincap on April 21, 2004.

Consequent to this acquisition, the combined shareholding of the erstwhile promoter group in the company increased from 73.48 to 73.75 per cent in the financial year 2004-05.

 

Saraf Holdings had further acquired additional 500 shares constituting 0.07 per cent of the share capital of the Comfort Fincap in October 2005 thereby increasing the combined shareholding from 73.75 to 73.82 per cent in the year 2005-06.

At the time of second acquisition, the amended SAST (Substantial Acquisition of Shares and Takeovers) Regulations, 2004 came into effect from January 3, 2005 which mandated Saraf Holdings to make an public announcement to acquire the increased 500 shares.

According to the amendment, any acquisition by an acquirer who together with PACs (persons acting in concert) with him has acquired 55 per cent or more but less than 75 per cent of the shares and voting rights in a target company would trigger the obligation of making the public announcement under the new Take over norms.

Hence the acquisition of 500 shares by the erstwhile promoters were in violation of Take over regulations, Sebi said in an order.

"I hereby impose a penalty of Rs 5 lakh in respect of increase of shareholding of erstwhile promoter group of the target company(Comfort Fincap) in violation of Regulation... of SAST," said adjudicating officer Santosh Shukla.

"The liability in this regard is joint and several and applicable to the entities in erstwhile promoter group. The aforesaid penalty amount shall be paid/remitted by the Noticee alone or by erstwhile promoters jointly within 45 days of receipt of this order" he said.