SEBI slaps Rs 50 lakh fine on S Kumars Nationwide's 9 promoters

Markets regulator Securities and Exchange Board of India (SEBI) on Thursday imposed a total penalty of Rs 50 lakh on nine promoter entities of textile firm S Kumars Nationwide for disclosure lapses.

According to SEBI, the nine promoter entities are Nitin S Kasliwal, Jyoti N Kasliwal, Anjaneya Holdings, N Essence Holdings, Sansar Exim, Tulja Enterprises, Chamundeshwari Merchantile, Verve Properties & Investment and Ingenious Finance & Investment.

During the inspection of the shareholding of S Kumars, SEBI observed that the nine entities had "failed to make disclosures regarding creation/ invocation/ release of certain pledge transactions and off market sale/ purchase of shares" of the company.

By failing to make the disclosures, they had allegedly violated the provisions of SAST (Substantial Acquisition of Shares and Takeovers) Regulations and PIT (Prohibition of Insider Trading) Regulations.

In its 27-page order, Sebi noted that the nine entities had contended that there was no malafide intention in not making disclosures and these were technical or administrative lapses. However, rejecting the contention, Sebi said the requirement of disclosures is mandatory in nature.

"The correct and timely disclosures under SAST Regulations/ PIT Regulations are an essential part of the proper functioning of the securities market and failure to do so results in preventing investors from taking well informed decision," Sebi said.

As per the regulator, the transactions or pledge were made by the nine entities in respect of their individual shareholding in S Kumars and accordingly, "being the promoters of the company" they were required to make disclosures.

Noting that the nine entities "failed to make the required disclosures in respect of pledge transactions / off market transactions and made disclosures very belatedly", the regulator said they have violated SAST and PIT Regulations.