Markets watchdog SEBI has imposed a total penalty of Rs 79 lakh on the managing director and six directors of Ranklin Solutions for disclosure lapses and violation of insider trading norms.
The regulator during its investigation between February 2010 and January 2011 found that the MD of the firm, MJVVD Prakash, failed to make requisite disclosures under Takeover norms and did not make an open offer after change in his holding in the company.
Under the Substantial Acquisition of Shares and Takeovers (SAST) norms, an entity has to make an open offer in case its shareholding goes beyond a certain threshold.
Prakash held 14.6 per cent of the share capital of the company and on June 29, 2010 he acquired 35,000 shares which increased his shareholding to 15.29 per cent, SEBI noted in its order dated Apr 30.
“The holding of Prakash in the company has crossed 15 per cent ... Prakash is required to make a public announcement to acquire shares of the company in terms of ... SAST Regulations. However, it is observed that Prakash has failed to make open offer,”SEBI
SEBI further noted that Prakash had traded while in possession of unpublished price sensitive information, a practice prohibited under PIT regulations.
Besides, SEBI in a separate order noted that Prakash along with six directors also failed to frame code of conduct for prevention of insider trading, as required under insider trading norms.
Consequently, a total fine of Rs 49 lakh was imposed on Prakash while the six directors -- P Venkateswara Rao, M Jyotsana Lakshmi, JVV Raghava Kumar, M Satish Kumar, K S Chakravarthi and K Vijaya Rama Raju -- were fined Rs 5 lakh each.
It could not be confirmed whether the individuals are continuing on the same position.
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