SAT lowers fine by Rs 1 lakh each on 5 entities

The Securities Appellate Tribunal (SAT) today lowered by Rs 1 lakh each on five entities the penalty imposed by Sebi in an alleged non-compliance with takeover code in Datasoft Application Software case.

While upholding Sebi's order, the Tribunal said it has reduced the penalty to Rs 3 lakh from Rs 4 lakh for each of the five entities because of inordinate delay on the part of market regulator in finalising the case.

The five appellants are R Shankar, GS Sridhar, A Rajendra Prasad, PV Muralikrishna and Dwarkadhish Import & Export.

The Tribunal said that market regulator took 12 years to pass an order against the entities in Datasoft Application Software (India) Ltd case where the facts were simple and investigation could be concluded within a short time.

In this case, alleged violation took place in 2000 and Sebi started probe into the matter as early as in 2003, it issued the show cause notice to the appellant in February, 2009 and passed the order only in April this year.

Consequently, the Tribunal said," ...while upholding the findings of the adjudicating officer (Sebi), the penalty is reduced to Rs 1 lakh in respect of each of the appellants."

In April this year, Sebi had slapped a fine of Rs 4 lakh each on nine entities for alleged non-compliance with takeover code in Datasoft Application Software.

The regulator had said that a total of 60.56 lakh shares amounting to 15.85 per cent stake of the company were allotted to nine entities including five appellants, which were known or connected to each other.

With the acquisition of these shares, acquirers were supposed to comply with the requirements laid down therein including making of a public offer, however, they failed to comply with the Sebi's guidelines.

Sebi's order was issued to nine entities, however only five appealed to Tribunal.

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