BEFORE THE ADJUDICATING OFFICER SECURITIES AND … · Karan Holdings Pvt. Ltd. (PAN AABCK7548R) and...

______________________________________________________________________________________ Adjudication Order in the matter of M/s. Bloom Dekor Ltd. of 46

BEFORE THE ADJUDICATING OFFICER SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO. AK/AO- 106-114/2015] ______________________________________________________________________________

UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995

In respect of

Dr. Sunil Gupta (PAN AAXPG1046R), Ms. Rupal Gupta (PAN AAXPG1150C), Dr. Sunil Gupta (HUF) (PAN

AAAHC3650E), Mr. Sharad Gupta (PAN ADVPG3031B), M/s. Suncare Traders Ltd. (PAN AACCS1318N),

Mr. Mayur Parikh (PAN AHAPP7753Q), Mr. Ashok C Gandhi (PAN No. ABCPG5178J), M/s. Karan

Holdings Pvt. Ltd. (PAN AABCK7548R) and M/s. Anik Holdings Pvt. Ltd. (PAN AADCA0047R)

In the matter of

M/s. Bloom Dekor Limited

FACTS OF THE CASE

1. M/s. Bloom Dekor Ltd. (hereinafter referred to as ‘the company’) is a company incorporated

under the Companies Act. A letter of offer under regulation 11(1) of SEBI (Substantial Acquisition

of Shares and Takeover) Regulations, 1997 (hereinafter referred to as ‘Takeover Regulations’) was

made by Dr. Sunil Gupta and Ms. Rupal Gupta to acquire 12,00,000 fully paid up equity shares of

Rs 10/- each at Rs. 15.82 per share (representing 20% of the total issued and subscribed equity

share capital and 20% of the voting right) of the company. The public announcement of the same

was made on 30.09.2011.

2. While examining the aforesaid letter of offer document of Dr. Sunil Gupta and Ms. Rupal Gupta to

acquire the shares of the company, SEBI inter alia observed that the promoters of the company

viz. Dr. Sunil Gupta, Ms. Rupal Gupta, Dr. Sunil Gupta (HUF), M/s. Suncare Traders Ltd. and Mr.

Sharad Gupta (hereinafter collectively referred to as ‘the Promoter Noticees’) and promoter late

Mr. Ramesh Shah had in the past violated regulation 11(1) read with Regulation 14(1) of the

Takeover Regulations during the years 1998-2000. Based on the aforesaid information with

respect to violation of the Takeover Regulations, Adjudication proceedings under Chapter VI-A of

Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) were


initiated against the Promoter Noticees and promoter late Mr. Ramesh Shah under Sec 15 H(ii) of

SEBI Act to inquire into and adjudicate the alleged violation of regulation 11(1) read with

Regulation 14(1) of the of the Takeover Regulations.

APPOINTMENT OF ADJUDICATING OFFICER

3. Ms. Barnali Mukherjee was appointed as the Adjudicating Officer on 27.06.2013 under section 15-I

of SEBI Act read with rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by

Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘SEBI Rules’) to inquire into and

adjudge the alleged violations committed by the Promoter Noticees and promoter late Mr.

Ramesh Shah.

4. Consequent upon the transfer of Ms. Barnali Mukherjee, I was appointed as the Adjudicating

Officer vide Order dated 08.08.2013 under Section 15-I of the SEBI Act read with rule 3 of SEBI

Rules to inquire into and adjudge under Section 15H(ii) of the SEBI Act for the alleged violation of

Regulations 11(1) read with 14(1) of Takeover Regulations committed by the Promoter Noticees

and promoter late Mr. Ramesh Shah.

SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

5. A common Show Cause Notice (hereinafter referred to as “SCNs”) Ref. No.

EAD/AK/VRP/25814/2013, EAD/AK/VRP/25812/2013, EAD/AK/VRP/25817/2013,

EAD/AK/VRP/25819/2013 and EAD/AK/VRP/25823/2013 dated 09.10.2013 was issued to the

Promoter Noticees under Rule 4(1) of SEBI Rules communicating the alleged violation of Takeover

Regulations as detailed below. A copy of shareholding of the promoter group and status of

compliance document was also sent along with the SCN.

6. The Promoter Noticees were called upon to show cause as to why an inquiry should not be

initiated against it and penalty be not imposed under Section 15H(ii) of the SEBI Act for the alleged

violations.


7. Dr Sunil Gupta, one of the promoter Noticees, submitted a reply to the SCN for and on behalf of

himself and on behalf of the other promoter Noticees viz. Ms. Rupal Gupta, Sunil Gupta (HUF),

M/s. Suncare Traders Ltd. (hereinafter referred to as ‘Suncare’) and also on behalf of promoter

late Mr. Ramesh Shah vide letter dated 07.12.2013. The adjudication proceedings in respect of

promoter late Mr. Ramesh Shah, however, have already been disposed of vide Adjudication Order

dated 31.12.2013 as the matter became infructuous on account of his death on 04.10.2013.

8. Vide the aforesaid letter, Dr. Sunil Gupta therefore on behalf of himself and on behalf of Promoter

Noticees viz. Ms. Rupal Gupta, Dr. Sunil Gupta (HUF) and Suncare has inter alia submitted its

response as under:

8.1 With respect to the alleged transaction/trigger date 04.04.1998 for acquisition of 3,89,210

equity shares (12.99%):

8.1.1 That the company was incorporated in the year 1992 with paid-up capital of Rs. 56

lacs;

8.1.2 That Dr. Sunil Gupta, the promoter, a medical doctor by qualification, spurred by the

huge success of his first maiden venture M/s. Sundek India Ltd., set up his dream

venture viz. Bloom Dekor Ltd. (the company) in 1993;

8.1.3 That the company came out with an IPO in the year 1993 by issuing 26,90,000 equity

shares to the public at a price of Rs. 10/- each at par;

8.1.4 That Gujarat Venture Finance Ltd. (hereinafter referred to as ‘GVFL’) - a venture

finance company had subscribed to the promoters' equity capital of the company to the

extent of Rs. 35.50 lacs of which Rs. 30.00 Lacs was to be locked in for 5 years and

balance for 3 years;

8.1.5 That in the initial years itself, the company had difficult time due to defective

machinery from German supplier and subsequent litigations. The performance of the

company suffered badly due to same. The company incurred losses in that period which

had impacted its performance till the financial year 1999-2000;

8.1.6 That since then, GVFL started pressurizing the promoters to agree to buy back the

shares held by GVFL, as the said shares were under lock-in till July, 1998 as per the


shareholders' Agreement. Hence the promoters had to purchase all the shares in a

single lot at a price agreed between the promoters and GVFL;

8.1.7 That GVFL vide letter dated 24.04.1997 offered the shares at an agreed price for re-

purchase by the Promoters in a single lot. In view of the said letter Dr. Sunil Gupta

(1,85,000 shares), Mrs Rupal Gupta (70,000 shares) and Dr.Sunil Gupta(HUF) (70,000

shares) had purchased 3.25 lac shares from GVFL vide proposal and acceptance letter

dated 24.04.1997;

8.1.8 That since the Takeover Regulations were newly introduced then, they had no idea of

alleged non compliance of the Takeover Regulations;

8.1.9 That hence it has been requested that a lenient view in the aforesaid “forced buy-back”

be taken. It has been submitted that later on SEBI had come out with an amendment

w.e.f. 30-12-2000 exempting transfer of shares pursuant to an agreement between

venture capital fund and promoters of the company;

8.1.10 That the balance shares i.e. 64,210 shares representing 1.97% of the total capital of the

company were purchased from open market in small lots and within the permissible

exempt limits.

8.2 With respect to the alleged transaction/trigger date 04.07.1998 for acquisition of 2,29,800

equity shares upon reissue of forfeited shares (7.12%):

8.2.1 That subsequent to the public issue, 2,54,700 equity shares remained partly paid-up till

its forfeiture in the year 1994. The company forfeited these shares in the year 1994;

8.2.2 That looking at the extreme financial condition of the company during initial years, the

promoters had no choice, but, to further infuse the much required funds. This was done

by way of allotment/re-issue of 2,54,700 forfeited equity shares to the promoters and

other shareholders on 30.06.1998;

8.2.3 Out of the above 2,54,700 reissued shares, 30,500 and 32,500 equity shares were

issued to promoters viz., Dr. Sunil Gupta and Ms. Rupal Gupta respectively and

1,91,700 equity shares were allotted to the shareholders viz., 1,48,000 equity shares to

Suncare and 43,700 equity shares to individual shareholders;


8.2.4 That Suncare was promoted by one Mr. Rasikal Amrutlal Shah and his family

members/friends and was one of the distributers of the company products for Gujarat

region;

8.2.5 That Suncare was never a part of the promoters of the company and hence the

acquisition and allotment of 1,48,000 equity shares being 4.55% of the paid up capital

cannot be alleged to violate the provision of Takeover Regulations;

8.2.6 That since Suncare had subscribed to forfeited shares, its name was mentioned in the

annual return as body corporate and not as a promoter. This may have happened due

to the misinterpretation of SEBI Rules and Regulations by the company;

8.2.7 To consider the allotment and acquisition of shares by ‘Suncare’ as a public

shareholder, independent from allotment and acquisition of shares made by the

promoters;

8.2.8 that the name of Suncare was inadvertently disclosed in all the disclosures filed with

the stock Exchanges.

8.3 With respect to the alleged transactions during 1999-2000 for acquisition of 4,07,700 (12.54%)

equity shares:

8.3.1 That being one of the most reputed and respected promoters in the laminate industry,

most of IPO equity shares were originally subscribed by the trade partners and trade

community, however, in view of the mounting losses and subsequent erosion of share

value in initial years, the shareholders were not happy. Hence, in order to satisfy the

shareholders and in good faith, the promoters had to facilitate purchase of their shares

from the open market;

8.3.2 That the shares, thus, purchased by the promoters, were small in numbers and the

promoters were unable to gauge the gravity or anticipate that acquisition would lead

to any such non-compliance or contravention. The promoters were also not well versed

with the provisions of the Takeover Regulations, since the said Regulation was new at

that particular point of time;

8.3.3 That moreover due to very fragile and poor financial condition of the company, the

company did not have the service of a full time company secretary during the period


under consideration to advise them on the proper mechanism and compliance for such

actions;

8.3.4 Further, that the promoters were always in control of the company since its public issue

and there was no such motive to gain the control over the company or deceive or

defraud the investors for undue gain. The shares acquired either from GVFL or by way

of reissue of shares or through open market were never disposed of or used for

disproportionate gain to the promoters.

9. Promoter Noticee Mr. Sharad Gupta vide letter dated 29.10.2013 submitted in his interim reply

that the notice dated 09.10.2013, in which he was named as one of the Noticees, was received by

his brother Dr. Sunil Gupta at his address on 19.10.2013. Mr. Sharad Gupta stated that his

attention was brought to the SCN on 25.10.2013 by an employee of Dr Sunil Gupta. Mr. Sharad

Gupta further submitted that he and his brother were estranged since 1990 and that he never

lived and did not currently live with Dr. Sunil Gupta at the address given in the SCN and provided

his correspondence address. Mr. Sharad Gupta vide the said letter also sought a clarification on

the discrepancy noticed in the SCN with respect to maximum liability under Section 15H(ii) of SEBI

Act during the relevant period of allegation. Vide letter dated 05.11.2013, Mr. Sharad Gupta

submitted his detailed reply to the SCN, which inter alia stated as follows:

a. That although Dr. Sunil Gupta is his brother, they have had minimal contact for the past 23

years. That they became estranged in 1990 when he separated from the family, left the family

home and changed his residence. At that point their family was engaged in the business of

decorative laminates (M/s. Sundek India Ltd.), but, he had his independent broking business

and earned his income substantially through brokerage fees and investment in the stock

market. That he had no part or share in the business run by his brother by way of M/s. Sundek

India Ltd.;

b. That in 1992, Dr. Sunil Gupta also separated from his family and its business and floated a new

company, M/s. Bloom Dekor Ltd. (the company) which competed with M/s. Sundek India Ltd. in

the same field of decorative laminates. However, that Mr. Sharad Gupta had no part to play in

either of the two companies and had his independent broking business;


c. That Mr. Sharad Gupta did not participate in the initial public issue of Bloom Dekor Ltd.

(company) shares, and was neither a share subscriber, nor promoter, nor part of the company's

management;

d. That in 1996 his father late Mr. Sitaram Laxminarayan Gupta expired, and upon the request of

his mother he returned to the family home and joined M/s. Sundek India Ltd as employee,

putting his investment business on hold;

e. That in 1998, he made regular investments in public limited companies. That a few years later,

he observed that M/s. Bloom Dekor Ltd. (the company) was doing very well and had strong

fundamentals, hence, with a view to earning a handsome profit, he made an investment

amounting to approx. Rs. 7 lacs;

f. That during this time, he was still on non-speaking terms with his brother Dr. Sunil Gupta and

therefore had no part to play in the running of his company. That he was also entirely unaware

of the actions and investments that Dr. Sunil Gupta and his family/acquaintances made in the

coming years. Further, that he was therefore without knowledge of the impugned transactions

between 1998 to 2000, and even those after that period that his brother and his family made

with respect to shares of the company M/s. Bloom Dekor Ltd.;

g. That upon receiving the show cause notice, he investigated and found that he had been listed

as a promoter, without his prior knowledge in the filings made by the company;

h. That he noticed certain discrepancies in the filing made by the company with Bombay Stock

Exchange Ltd. (hereinafter referred to as ‘BSE’) that showed him as a part of the promoter

group for the years 2001-2011, but, from September 2011 he is no longer shown as a promoter;

i. That while he may be a deemed promoter by virtue of his biological relationship with his

brother, he had no involvement in the management or promotion of the company;

j. That in any case, there has been no concerted action to acquire shares together, which is an

essential condition under Regulation 11(1) of the Takeover Regulations ("no acquirer who,

together with persons acting in concert whim…") for imposing penalty under Sec 15H(ii) of the

SEBI Act;

k. That his brother/his family and acquaintances have never entered into any formal or informal

agreement to acquire shares in the company M/s. Bloom Dekor Ltd. together;

l. That his purchase of shares in the company M/s. Bloom Dekor Ltd. had been entirely for

investment purposes;


m. That he did not have any intention to either control the company or acquire shares/voting

rights in contravention of the Takeover Regulations. That while his brother's actions were

ostensibly to consolidate control over his company, his investments were in order to achieve

good returns.

10. The Noticee Mr. Sharad Gupta has inter alia further stated that the Takeover Regulations did not

deem promoters (or persons deemed to be promoters) to be acting in concert. In order to

substantiate his argument, Mr. Sharad Gupta has relied on the following view taken by the

Hon'ble Securities Appellate Tribunal (hereinafter referred to as ‘SAT’) in M/s. Modi Spinning &

Weaving Mills Co. Ltd v. SEBI:

“……It may be noted that the promoter as such need not be an acquirer automatically. Any person,

and share holder including the promoter will become an acquirer or a person acting in concert with

the acquirer only if he falls within the definition of these expressions provided in regulation 2(b)

and 2(e). It is the conduct of the party that decides the identity. A dormant promoter or a promoter

simpliciter who neither acquires or agrees to acquire shares or voting rights or control over the

target company is not an acquirer and his share holding in the target company cannot be

considered as the share holding of the acquirer warranting exclusion from the public shareholding.

Similarly if the characteristics of a person acting in concert stated in the definition are found

missing in the case of a person, it may not be proper to consider him as a person acting in concert

with the acquirer.”

11. Mr. Sharad Gupta has further highlighted that the same was upheld by the Hon'ble High Court of

Mumbai in K.K. Modi v. Securities Appellate Tribunal, which held that:

“…..It is significant that the definition of acquirer does not include a promoter, but includes

persons acting in concert with an acquirer. The question as to whether a person is acting in concert

with the acquirer is essentially a question of fact. A promoter may not act in, concert with the

acquirer, whereas a stranger might.”

12. In the interest of natural justice and in terms of rule 4(3) of the SEBI Rules, the Promoter Noticees

were granted an opportunity of personal hearing on 12.12.2013 vide hearing notice dated

18.11.2013 and the said notice was duly acknowledged by all the Promoter Noticees. Further, the


discrepancy pointed out by Mr. Sharad Gupta at para (5) of the SCN, as regards applicable charging

provision section 15H(ii) of the SEBI Act in the present case, was rectified in the hearing notice that

was issued.

13. Mr. Jayesh Vithlani, Company Secretary and Mr. Joby Mathew, Advocate Authorized

Representative (hereinafter referred to as ‘ARs’), appeared on behalf of the Promoter Noticees

viz. Dr. Sunil Gupta (in person) and on behalf of Ms. Rupal Gupta, Dr. Sunil Gupta (HUF) and

Suncare. The ARs and Dr. Sunil Gupta reiterated the written submissions made vide letter dated

07.12.2013. The ARs and Dr. Sunil Gupta were inter alia advised to submit the details of the

agreement entered into by the company and GVFL, copy of the contract notes in respect of

acquisition of 4,07,000 shares stated in the SCN, etc.

14. Mr. Vansh Sharad Gupta, son of Mr. Sharad Gupta and Mr. Sharad Gupta (in person) appeared at

hearing and reiterated the submissions made vide their reply dated 05.11.2013. In addition to the

written reply, the following further submissions on behalf of Mr. Sharad Gupta were made at the

time of hearing:

a. That the Noticee Mr. Sharad Gupta had purchased 65,500 shares in the year 2000 through a

series of 2-3 transactions in a period of few days by way of open market purchase, however,

Mr. Sharad Gupta did not have the supporting documents such as contract note etc. to support

his claim, since as per the income tax practice records of last 8 years only were maintained by

him and the entire episode came to notice only when the SCN was issued;

b. That Mr. Sharad Gupta was not aware of agreement entered, if any, by the promoters with

third party in 1997/ 1998 for acquisition of shares, if any, by the promoters;

c. The copies of two judgments viz. Modi Spinning & Weaving Mills Company Ltd. Vs. SEBI before

the Hon’ble Securities Appellate Tribunal (SAT) decided on 09.11.2001 and K.K.Modi Vs. SAT

and Others before the Bombay High Court dated 05.11.2001, as referred in the reply dated

05.11.2013 were submitted during the hearing;

d. Original ration card of Mr. Sharad Gupta and Income Tax Returns for three years were shown

and it was submitted that the copies thereof would be submitted by 15.12.2013;

e. The details given in Annexure III to the SCN were disputed by Mr. Sharad Gupta.


15. Thereafter vide letter dated 20.12.2013, Dr. Sunil Gupta submitted a copy of the Shareholders’

Agreement entered into between Bloom Dekor and GVFL. Dr. Sunil Gupta stated that as per the

Shareholders’ Agreement, GVFL had the power to take control of the company and eventually

even sell the same. Dr. Sunil Gupta again reiterated that GVFL exerted substantial pressure on the

promoters of the company to buy out the shares allotted to it. In support thereof, copies of

correspondence with GVFL was provided. Further, details of disclosures made to the stock

exchanges in respect of the promoters holding on 31.03.1998, 31.03.1999 and 31.03.2000, as well

as copy of a letter dated 15.04.1998 sent by the company to Ahmedabad Stock Exchange Ltd.

(herein after referred to as ‘ASE’) was submitted. A copy of the Memorandum of Association of

the company, letter dated 24.04.1998 sent to ASE and copies of some of the contract notes in

respect of the market purchases of shares of the company were made by Dr. Sunil Gupta and Dr.

Sunil Gupta HUF were also submitted. Dr. Sunil Gupta, Ms. Rupal Gupta, M/s. Suncare Traders Ltd

and Dr. Sunil Gupta HUF also submitted undertakings stating that no action had been taken by

SEBI against them for violation of the SEBI (Prohibition of Insider Trading) Regulations, 1992,

Takeover Regulations (other than the present proceedings) or under the SEBI Act, or any other

Regulations made thereunder.

16. From the documental proof provided vide the aforesaid reply dated 12.12.2013, it was observed

that Dr. Sunil Gupta (1,85,000 shares), Ms Rupal Gupta (70,000 shares) and Dr. Sunil Gupta(HUF)

(70,000 shares) had purchased 3,25,000 shares from GVFL vide proposal and acceptance letter

dated 24.04.1997 at Rs. 7/- per share. It was noted from the Annual Report of the company for

1997-98 that the paid-up capital of the company was 29,95,200 shares of Rs.10/- each (excluding

the forfeited shares), thus, the acquisition of 3,25,000 shares (10.85%) as aforesaid triggered

Regulation 11(1) of the Takeover Regulations.

17. It was further observed that Dr. Sunil Gupta had purchased 30,600 shares from open market in the

year 1997-98. This together with the shares acquired by Suncare (14,100 shares), Mr. Sharad

Gupta (19,500 shares) and late Shri Ramesh Shah (10 shares) constituted the balance 64,210

shares acquired from open market. Dr. Sunil Gupta vide letter dated 07.12.2013 had stated that

the balance 64,210 shares constituted 1.97% of the total capital of the company. However, it was

noted that the balance 64,210 shares constituted 2.14% of the paid-up capital of the company,


which was 29,95,200 shares of Rs.10/- each (excluding the forfeited shares), and the limit for

acquiring additional shares under Regulation 11 (1) of the Takeover Regulations as prevalent at

the relevant point of time was 2% in any period of 12 months without making public

announcement. Hence, it appeared that Dr. Sunil Gupta had tried to mislead at the adjudication

stage by stating that balance acquisition of 64,210 shares constituted less than 2% of the paid-up

capital of the company.

18. From the above, it was observed that in the year 1997-98, Regulation 11(1) was triggered twice by

the Promoter Noticee Dr. Sunil Gupta – first on acquisition of 3,25,000 shares from GVFL by

Promoter Noticees viz. Dr. Sunil Gupta, Ms. Rupal Gupta and Dr. Sunil Gupta (HUF), and again

when 64,210 shares were acquired through open market by the Promoter Noticees viz. Dr. Sunil

Gupta, Suncare, Sharad Gupta and late Shri Ramesh Shah. In view of the same, a supplementary

Show Cause Notice (SCN) dated 16.07.2014 was issued to Dr. Sunil Gupta. Dr. Sunil Gupta replied

to the same vide letter dated 20.09.2014 reiterating the written submissions made vide letter

dated 07.12.2013 and oral submissions made during the personal hearing held on 12.12.2013. It

was inter alia further stated therein that Dr. Sunil Gupta had assumed the total paid up capital as

on 31.03.1998 as 32,50,000 shares as per the Balance Sheet for the Financial Year 1997-98 and

arrived at the percentage of 1.97%, and that he did not want to mislead SEBI.

19. Subsequently, a Supplementary Show Cause Notice (SCN) dated 20.02.1015 was issued to the

entire promoter group of the company at the relevant time (apart from the deceased promoter

Mr. Ramesh Shah) viz. Dr. Sunil Gupta, Ms. Rupal Gupta, Dr Sunil Gupta (HUF), Suncare, Mr.

Sharad Gupta, Mr. Mayur Parikh, Mr. Ashok C Gandhi, M/s. Karan Holdings Pvt. Ltd., M/s. Anik

Holdings Pvt. Ltd. (hereinafter collectively referred to as the ‘Promoter Noticee Group’). It was

alleged therein that each of the Promoter Noticees comprising the Promoter Noticee Group had

failed to comply with the provisions of Regulation 11(1) read with 14(1) of the Takeover

Regulations on four ( 4) occasions due to the following acquisitions:


Dat

e of

tran

sact

ion

Identity of

Allottee(s)

/Acquirer(

s) Seller(s)

Mode of

Allotmen

t/Acquisi

tion/Sold

Allotted

Share

holding of

the allotte

(s) /

Acquirer(s)

Seller(s)

before the

instant

allotment/

purchase/S

ale

% of

Allotted

shareholdin

g sale of the

allot tee

(s)/

Acquirer(s)

Seller(s)

before the

instant

allotment/p

urchase/Sal

e

No. of

shares

allotte

d/

acquir

ed/

sold

% of

total

voting

capital

of target

compan

y of the

shares

allotted/

acquired

/sold

Share

holding

of the

allotte

e (s)

after

the

instant

allotm

ent/pu

rchase/

sale

% of

allotted

sharehol

ding of

the

allottee

(s) after

the

instant

allotme

nt/purch

ase/sold

Shareh

olding

of the

Promot

er

Group

before

the

instant

allotm

ent/pu

rchase/

sale

%

Sharehol

ding of

the

Promoter

Group

before

the

instant

allotmen

t/purchas

e/sale

Shareh

olding

of the

Promot

er

Group

after

the

instant

allotm

ent/pu

rchase/

sale

%of

holding

of the

Promote

r Group

after the

instant

allotmen

t/purcha

se/sale

Status of

complian

ce with

Takeover

Regulati

ons, as

applicabl

e

1997-98

Vari

ous

Dat

es

Rupal

Gupta

(See Note

1)

OM 79310 2.65 70000 2.34 149310 4.98 456170 15.23 526170 17.57 Non

complian

ce with

regulatio

n 11(1)

since

Acquires

had

acquired

12.99%

(389210

shares)

during

the 12

months

from

date of

1st

transacti

on and

the limit

was 2%

from

20.02.97

to

27.10.98

Sunil

Gupta

(HUF) (See

Note 1)

OM 350 0.01 70000 2.34 70350 2.35 526170 17.57 596170 19.90

Sunil

Gupta

(See Note

1 and 2)

O M 221510 7.40 21560

0

(1850

00 +

30600

)

7.20 437110 14.59 596170 19.90 811770 27.10

Suncare

Traders

Ltd(See

Note 2)

OM 0 0.00 14100 0.47 14100 0.47 811770 27.10 825870 27.57

Sharad

Gupta

See Note

2)

OM 0 0.00 19500 0.65 19500 0.65 825870 27.57 845370 28.22

Ramesh

Shah See

Note 2)

OM 0 0.00 10 0.00 10 0.00 845370 28.22 845380 28.22

OM denotes Open Market ; RFS denotes Reissue of Forfeited Shares


Date

of

tran

sacti

on

Identity

of

Allottee

(s) /

Acquirer(s

) Seller(s)

Mode of

Allotme

nt /

Acquisiti

on/ Sold

Allotted

Sharehold

ing of the

allotte (s)

/

Acquirer(s

) Seller (s)

before

the

instant

allotment

/

purchase/

Sale

% of Allotted

shareholding

sale of the

allotte(s)/

Acquirer(s)

Seller(s)

before the

instant

allotment/p

urchase/Sale

No. of

shares

allotte

d/

acquire

d/ sold

% of

total

voting

capital

of

target

compa

ny of

the

shares

allotte

d/

acquire

d/sold

Share

holding

of the

allotte

e (s)

after

the

instant

allotm

ent/

purcha

se/

sale

% of

allotte

d

shareh

olding

of the

allotte

e (s)

after

the

instant

allotm

ent/

purcha

se/

sold

Sharehol

ding of

the

Promote

r Group

before

the

instant

allotme

nt/purc

hase/sal

e

%of

holding

of the

Promoter

Group

before

the

instant

allotmen

t/

purchase

/ sale

Shareho

lding of

the

Promote

r Group

after the

instant

allotme

nt/purc

hase/sal

e

%of

holding

of the

Promote

r Group

after the

instant

allotmen

t/purcha

se/sale

Status of

complian

ce with

Takeover

Regulatio

ns, as

applicabl

e

1998-99 (April 1998-June 1998)

10/4

/98

Rupal

Gupta(See

Note 3)

OM 149310 4.59 18800 0.63 168110 5.22 845380 26.01 864180 26.64 Non

complian

ce with

regulatio

n 11(1)

since

Acquires

had

acquired

7.12%

(229800

shares)

during

the 12

months

from date

of 1st

transacti

on and

the limit

was 2%

from

20.02.97

to

27.10.98

30/6

/98

Sunil

Gupta(See

Note 3)

RFS 437110 13.45 30500 0.94 467610 14.39 864180 26.59 894680 27.53

30/6

/98

Rupal

Gupta(See

Note 3)

RFS 168110 5.17 32500 1.00 200610 6.17 894680 27.53 927180 28.53

30/6

/98

Suncare

Traders

Ltd(See

Note 3)

RFS 14100 0.43 148000 4.55 162100 4.99 927180 28.53 1075180 33.08



Date

of

tran

sacti

on

Identity

of

Allottee

(s) /

Acquirer(s

) Seller(s)

Mode

of

Allotm

ent /

Acquisi

tion/

Sold

Allotted

Shareholdi

ng of the

allotte (s) /

Acquirer(s)

Seller (s)

before the

instant

allotment/

purchase/

Sale

% of

Allotted

shareholdin

g sale of the

allotte(s)/

Acquirer(s)

Seller(s)

before the

instant

allotment/p

urchase/Sale

No. of

shares

allotte

d/

acquire

d/ sold

% of

total

voting

capital

of

target

compa

ny of

the

shares

allotte

d/

acquire

d/sold

Share

holding

of the

allotte

e (s)

after

the

instant

allotm

ent/

purcha

se/

sale

% of

allotte

d

shareh

olding

of the

allotte

e (s)

after

the

instant

allotm

ent/

purcha

se/

sold

Sharehol

ding of

the

Promote

r Group

before

the

instant

allotme

nt/purch

ase/sale

%of

holding

of the

Promoter

Group

before

the

instant

allotmen

t/

purchase

/ sale

Sharehol

ding of

the

Promote

r Group

after the

instant

allotme

nt/purch

ase/sale

%of

holding of

the

Promoter

Group

after the

instant

allotment

/purchase

/sale

Status of

complia

nce with

Takeove

r

Regulati

ons, as

applicab

le

Period of 12 months from December 21, 1998

21/1

2/98

Rupal

Gupta See

Note 4)

OM 200610 6.17 20700 0.64 221310 6.81 1075180 33.08 1095880 33.72 Non

complia

nce with

regulatio

n 11(1)

since

Acquires

had

acquired

12.54%

(407700

shares)

during

the 12

months

from

date of

1st

transacti

on and

the limit

was 5%

from

27.10.98

to

23.10.01

Vari

ous

Date

s

Sunil

Gupta See

Note 4)

OM 467610 14.39 58600 1.80 526210 16.19 1095880 33.72 1154480 35.52

Vari

ous

Date

s

Sunil

Gupta See

Note 4)

OM 526210 16.19 127990 3.94 654200 20.13 1154480 35.52 1282470 39.46

Rupal

Gupta See

Note 4)

OM 221310 6.81 7500 0.23 228810 7.04 1282470 39.46 1289970 39.69

Sunil

Gupta

(HUF) See

Note 4)

OM 70350 2.16 94210 2.90 164560 5.06 1289970 39.69 1384180 42.59

Suncare

Traders

Ltd See

Note 4)

OM 162100 4.99 45400 1.40 207500 6.38 1384180 42.59 1429580 43.99

Sharad

Gupta See

Note 4)

OM 19500 0.60 53300 1.64 72800 2.24 1429580 43.99 1482880 45.63



Note 1: Dr. Sunil Gupta (1,85,000 shares), Ms Rupal Gupta (70,000 shares) and Dr. Sunil Gupta(HUF)

(70,000 shares) together with other promoters viz. Mr. Sharad Gupta, late Mr. Ramesh Shah, M/s.

Suncare Traders Ltd., Mr. Ashok C Gandhi, M/s. Anik Holdings Pvt. Ltd., Mr. Mayur Parikh and M/s. Karan

Holdings Pvt. Limited had purchased 3.25 lac shares from GVFL vide proposal and acceptance letter

dated 24.04.1997 at Rs. 7/- per share. It was noted from the Annual Report of the company for 1997-98

that the paid-up capital of the company was 29,95,200 shares of Rs.10/- each (excluding the forfeited

shares), thus, the acquisition of 3,25,000 shares (10.85%) as aforesaid triggered Regulation 11(1) of the

Takeover Regulations by the Promoter Noticee Group.

Note 2: Dr. Sunil Gupta (30,600 shares), M/s. Suncare Traders Ltd. (14,100 shares), Mr. Sharad Gupta

(19,500 shares), late Shri Ramesh Shah (10 shares), thus, a total of 64,210 shares constituting 2.14% of

the paid-up capital of the company were acquired from open market in 1997-98 together with other

promoters viz. Ms. Rupal Gupta, Sunil Gupta HUF, Mr. Ashok C Gandhi, M/s. Anik Holdings Pvt. Ltd., Mr.

Mayur Parikh and M/s. Karan Holdings Pvt. Ltd. These 64,210 shares constituted 2.14% of the paid-up

capital of the company and the limit for acquiring additional shares under Regulation 11(1) of the

Takeover Regulations as prevalent at the relevant point of time was 2% in any period of 12 months

without making public announcement, thus, the acquisition of 64,210 shares (2.14%) as aforesaid

triggered Regulation 11(1) of the Takeover Regulations by the Promoter Noticee Group.

Note 3: Acquisition by Ms. Rupal Gupta (18,800 shares) from open market on 10.04.1998 together with

other promoters viz. Dr. Sunil Gupta, Dr. Sunil Gupta HUF, Mr. Sharad Gupta, late Mr. Ramesh Shah, M/s.

Suncare Traders Ltd., Mr. Ashok C Gandhi, M/s. Anik Holdings Pvt. Ltd., Mr. Mayur Parikh and M/s. Karan

Holdings Pvt. Ltd. and reissue/ allotment of forfeited shares at Rs. 6/- per shares on 30.06.1998 to M/s.

Suncare Traders Ltd. (1,48,000 shares), Dr. Sunil Gupta (30,500 shares) and Ms. Rupal Gupta (32,500

shares) together with other promoters viz. Dr. Sunil Gupta HUF, Mr. Sharad Gupta, late Mr. Ramesh

Shah, Mr. Ashok C Gandhi, M/s. Anik Holdings Pvt. Ltd., Mr. Mayur Parikh and M/s. Karan Holdings Pvt.

Ltd. resulted in total acquisition of 2,29,800 equity shares by the Promoter Noticee group i.e. 7.12%

during the 12 months from the date of first transaction and the limit for acquiring additional shares

under Regulation 11 (1) of the Takeover Regulations as prevalent at the relevant point of time was 2% in

any period of 12 months without making public announcement. Thus, the acquisitions as aforesaid



Note 4: Ms. Rupal Gupta, Dr. Sunil Gupta, Dr. Sunil Gupta (HUF), M/s. Suncare Traders Ltd. and Mr.

Sharad Gupta had respectively acquired 28,200 shares (0.87%), 1,86,590 shares (5.74%), 94,210 shares

(2.90%), 45,400 shares (1.40%) and 53,300 shares (1.64%) from open market, together with other

promoters viz. late Mr. Ramesh Shah, Mr. Ashok C Gandhi, M/s. Anik Holdings Pvt. Ltd., Mr. Mayur

Parikh and M/s. Karan Holdings Pvt. Ltd., thus, a total of 4,07,700 shares (12.54%) during a period of 12

months from the date of the first transaction. The limit for acquiring additional shares under Regulation

11 (1) of the Takeover Regulations as prevalent at the relevant point of time was 5% in any period of 12

months without making public announcement and the Promoter Noticee Group had acquired 12.54%

during the 12 months on various dates from the date of first transaction, thus, triggering Regulation

11(1) of the Takeover Regulations.

20. Thereafter, Dr. Sunil Gupta filed a reply dated 02.04.2015 on behalf of Ms Rupal Gupta, Dr Sunil

Gupta (HUF), Suncare, Mr Mayur Parikh, Mr Ashok C Gandhi, M/s. Karan Holdings Pvt Ltd, M/s.

Anik Holdings Pvt Ltd and himself and reiterated their earlier submissions. It was stated that no

new allegation had been made in the SCN dated 20.02.1015 and that they had already answered

all the allegations made against them in the earlier SCN/s. While reiterating the submissions made

therein, it was also stated vide the said reply that in April 1997 only Dr Sunil Gupta, Dr Sunil Gupta

HUF and Ms Rupal Gupta acquired 3,25,000 shares from GVFL and none of the other promoters

had acquired shares of the company. The Noticee also reiterated that Suncare and Mr. Sharad

Gupta were not the Promoters of the company, and if shares acquired by them are excluded out

of 64,210 shares alleged to have been acquired by the Promoter Noticee Group in 1997-98 from

the open market, the shares acquired would become 30,610 shares i.e. 1.02% of the paid up

capital of the company, and at the relevant point of time, limit for the trigger of Regulation 11(1)

was more than 2%. It has been further stated that even if it is assumed that they were promoters,

it was incorrectly assumed by them that the percentage of acquisition was only 1.97% by

considering the subscribed capital of 32,50,000 shares, instead of considering the paid up capital

of 29,95,500 shares. Also that since Suncare was not a promoter of the company, hence purchase

of 1,48,000 shares during 10.04.1998 to 30.06.1998 cannot be included in acquisition under

Regulation 11(1), hence, the correct number of shares acquired under regulation 11(1) during the

said period was 81,800 shares (2,29,800 – 1,48,000) i.e. 2.52% of 32,50,000 shares. With respect

to the acquisition of 4,07,700 shares between 21.12.1998 to 31.03.2000, it has been pointed out

that the period of the acquisition becomes 15 months and not 12 months from the date of the first


transaction i.e. 21.12.1998. And since Suncare and Mr. Sharad Gupta were not promoters of the

company, their purchases viz. total of 98,700 shares (3.03%) cannot be included for calculating

acquisition made under Regulation 11(1) of the Takeover Regulations.

21. An opportunity for personal hearing was also granted to the Promoter Noticee Group on

22.06.2015. Vide email dated 22.06.2015, Dr Sunil Gupta, on behalf of Ms. Rupal Gupta, Dr Sunil

Gupta (HUF), Suncare, Mr Mayur Parikh, Mr Ashok C Gandhi, M/s. Karan Holdings Pvt Ltd, M/s.

Anik Holdings Pvt Ltd and himself reiterated his earlier replies and stated that they had nothing

further to submit, as such, they will not be availing of the opportunity for personal hearing. Mr

Sharad Gupta also replied to the Supplementary SCN dated 20.12.2015 and hearing Notice dated

29.05.2015 vide letter dated 22.06.2015, reiterating his earlier replies. The Noticee Mr. Sharad

Gupta also stated that he had nothing more to say in the matter and that his earlier replies may be

taken into account while finally deciding the matter.

CONSIDERATION OF ISSUES

22. I have carefully perused the written and oral submissions of Dr. Sunil Gupta on behalf of himself

and on behalf of the Promoters viz. Ms Rupal Gupta, Dr Sunil Gupta (HUF), Suncare, Mr Mayur

Parikh, Mr Ashok C Gandhi, M/s. Karan Holdings Pvt. Ltd., M/s. Anik Holdings Pvt. Ltd. and himself,

the written and oral submissions made by the Promoter Noticee Mr. Sharad Gupta and the

documents available on record. It is observed that the allegation against the Promoter Noticee

Group is regarding non-compliance of regulation 11(1) read with regulation 14(1) of Takeover

Regulations on four (4) occasions viz. acquisition of 3,25,000 shares (10.85%) and 64,210 shares

(2.14%) in the year 1997-98, acquisition of 2,29,800 shares (7.12%) in the year 1998-99 and

acquisition of 4,07,700 shares (12.54%) in the year 1999-00.

23. The issues that, therefore, arises for consideration in the present case are:

a. Whether the Promoter Noticees Group viz. Dr. Sunil Gupta, Ms. Rupal Gupta, Dr Sunil Gupta

(HUF), Suncare, Mr. Sharad Gupta, Mr Mayur Parikh, Mr Ashok C Gandhi, M/s. Karan Holdings

Pvt. Ltd. and M/s. Anik Holdings Pvt. Ltd. were the promoters of the company during the

relevant period 1997-2000?


b. If so, or even otherwise, whether the Promoter Noticee Group viz. Dr. Sunil Gupta, Ms. Rupal

Gupta, Dr Sunil Gupta (HUF), Suncare, Mr. Sharad Gupta Mr. Mayur Parikh, Mr. Ashok C

Gandhi, M/s. Karan Holdings Pvt. Ltd. and M/s. Anik Holdings Pvt. Ltd. have acted in concert

either by themselves or through or with each other in respect of (i) acquisition of 3,25,000

(10.85%) shares from GVFL vide proposal and acceptance letter dated 24.04.1997; (ii)

acquisition of a total of 64,210 shares constituting 2.14% of the paid up capital of the company

in 1997-98; (iii) acquisition of 18,800 shares by Ms Rupal Gupta on 10.04.1998 and reissue/

allotment of forfeited shares on 30.06.1998, which resulted in a total acquisition of 2,29,800

shares (7.12%); and (iv) acquisition of 4,07,700 (12.54%) shares in the 12 months from

21.12.1998?

c. If so, whether further the Promoter Noticee Group had violated Regulation 11(1) read with

regulation 14(1) of the Takeover Regulations, in view of the acquisitions as aforesaid without

making public announcements to acquire shares in accordance with the Takeover Regulations?

d. Do the violations, if any, attract monetary penalty under Section 15 H(ii) of SEBI Act?

e. If so, what would be the monetary penalty that can be imposed taking into consideration the

factors mentioned in Section 15-J of SEBI Act?

FINDINGS

24. Before moving forward, it is pertinent to refer to the provisions of Regulations 11(1) read with

regulation 14(1) of the Takeover Regulations as it was prevailing at the time of acquisition, which

reads as under:

Regulation 11 (1) of Takeover Regulation before amendment dated 28-10-1998

Consolidation of holdings.

11. (1) No acquirer who, together with persons acting in concert with him, has acquired, in

accordance with the provisions of law, not less than 10% but not more than 51% of the shares or

voting rights in a company, shall acquire, either by himself or through or with persons acting in

concert with him, additional shares or voting rights entitling him to exercise more than 2% of the

voting rights, in any period of 12 months unless such acquirer makes a public announcement to

acquire shares in accordance with the regulations.


Regulation 11 (1) of Takeover Regulation after amendment dated 28-10-1998, but, before

amendment dated 24-10-2001

Consolidation of holdings.

11. (1) No acquirer who, together with persons acting in concert with him, has acquired, in

accordance with the provisions of law, 15 per cent or more but less than 75 per cent of the shares

or voting rights in a company, shall acquire, either by himself or through or with persons acting in

concert with him, additional shares or voting rights entitling him to exercise more than 5% of the

voting rights, in any period of 12 months unless such acquirer makes a public announcement to

acquire shares in accordance with the regulations.

Timing of the public announcement of offer.

14.(1) The public announcement referred to in regulation 10 or regulation 11 shall be made by the

merchant banker not later than four working days of entering into an agreement for

acquisition of shares or voting rights or deciding to acquire shares or voting rights exceeding

the respective percentage specified therein

Regulation 2(1)(e) of the Takeover Regulations, which reads as under:

2. (1) In these Regulations, unless the context otherwise requires:—

(e) ―person acting in concert‖ comprises,—

(1) persons who, for a common objective or purpose of substantial acquisition of shares or voting

rights or gaining control over the target company, pursuant to an agreement or understanding

(formal or informal), directly or indirectly co-operate by acquiring or agreeing to acquire shares or

voting rights in the target company or control over the target company.

(2) Without prejudice to the generality of this definition, the following persons will be deemed to be

persons acting in concert with other persons in the same category, unless the contrary is

established:

(i) a company, its holding company, or subsidiary or such company or company under the same

management either individually or together with each other;


(ii) a company with any of its directors, or any person entrusted with the management of the funds

of the company;

(iii) directors of companies referred to in sub-clause (i) of clause (2) and their associates;

(iv) mutual fund with sponsor or trustee or asset management company;

(v) foreign institutional investors with sub-account(s);

(vi)merchant bankers with their client(s) as acquirer;

(vii)portfolio managers with their client(s) as acquirer;

(viii)venture capital funds with sponsors;

(ix) banks with financial advisers, stock brokers of the acquirer, or any company which is a holding

company, subsidiary or relative of the acquirer :

Provided that sub-clause (ix) shall not apply to a bank whose sole relationship with the acquirer or

with any company, which is a holding company or a subsidiary of the acquirer or with a relative of

the acquirer, is by way of providing normal commercial banking services or such activities in

connection with the offer such as confirming availability of funds, handling acceptances and other

registration work;

(x) any investment company with any person who has an interest as director, fund manager,

trustee, or as a shareholder having not less than 2 per cent of the paid-up capital of that company

or with any other investment company in which such person or his associate holds not less than 2

per cent of the paid-up capital of the latter company.

Note : For the purposes of this clause ―associate‖ means,—

(a) any relative of that person within the meaning of section 6 of the Companies Act, 1956 (1 of

1956); and

(b) family trusts and Hindu undivided families;

25. The first issue for consideration is whether the Promoter Noticees viz. Dr. Sunil Gupta, Ms. Rupal

Gupta, Dr. Sunil Gupta (HUF), Suncare, Mr. Sharad Gupta, Mr Mayur Parikh, Mr Ashok C Gandhi,

M/s. Karan Holdings Pvt. Ltd. and M/s. Anik Holdings Pvt. Ltd. were the promoters of the company

at the relevant point of time?

a. I find from the replies and submissions made before me by Dr. Sunil Gupta on behalf of himself

and on behalf of the Promoter Noticees viz. Ms. Rupal Gupta, Dr. Sunil Gupta (HUF), Suncare,


Mr Mayur Parikh, Mr Ashok C Gandhi, M/s. Karan Holdings Pvt. Ltd. and M/s. Anik Holdings

Pvt. Ltd. that there is no dispute with regard to the fact that Dr. Sunil Gupta, Ms. Rupal Gupta,

Dr. Sunil Gupta (HUF), Mr Mayur Parikh, Mr. Ashok C Gandhi, M/s. Karan Holdings Pvt. Ltd. and

M/s. Anik Holdings Pvt. Ltd. were the promoters of the company at the relevant point of time.

b. I, however, find from reply dated 07.12.2013 of Dr. Sunil Gupta that vide the said reply it has

now been claimed that Suncare was one of the distributers of the company products for

Gujarat region, promoted by one Mr. Rasikal Amrutlal Shah and his family members/friends,

and that Suncare was never a part of the promoters of the company. It has also been claimed

that the name of Suncare was mentioned in the annual return as body corporate and not as a

promoter, hence, to consider the allotment and acquisition of shares by ‘Suncare’ as a public

shareholder, independent from allotment and acquisition of shares made by the promoters.

c. I find that contrary to the submission made as aforesaid, the letter of Offer dated 23.01.2012

signed by Dr. Sunil Gupta and Ms. Rupal Gupta as Acquirers, jointly and severally accepting full

responsibility for the information contained therein, had included changes in the shareholding

of Suncare under Para 6.17 captioned ‘Change in Equity Shareholding of Promoter Group and

Status of Compliance’. Besides Para on ‘Background of the Acquirers’ declared Dr. Sunil Gupta

as the promoter and Director of Suncare and Ms. Rupal Gupta as the promoter of Suncare.

Further, the name of Suncare also featured in Para 4.5 of the letter of Offer under the head

‘Details of Companies promoted by the Acquirers’. I note that the facts as above have never

been disputed either by Suncare or by Dr. Sunil Gupta, except after the issue of SCN in the

extant matter.

d. In the matter, I find that Dr. Sunil Gupta vide letter dated 20.12.2013 has forwarded a copy of

the company’s letter dated 15.04.1998 addressed to Ahmedabad Stock Exchange Ltd. (herein

after referred to as ‘ASE’) in support of his claim. The said letter, I find, points out that Dr. Sunil

Gupta HUF (5,07,460 shares), Ms. Rupal Gupta (1,50,110 shares), M/s. Karan Holdings (P) Ltd.

(1,05,000 shares) and M/s. Anik Holding (P) Ltd. (50,000 shares) were the promoters and

persons acting in concert with the promoters at the relevant point of time, whereas Suncare

has inter alia been stated to be not associated directly or indirectly with the promoters or

persons acting in concert with the promoters.


e. I, however, note here that the said letter dated 15.04.1998 was sent by the company to ASE to

provide clarification and explanation in the matter of ‘Reissue of Forfeited Shares’. On perusal

of the said letter, I note that the letter was issued to clarify to ASE that out of persons to whom

the forfeited shares were to be issued, only Dr. Sunil Gupta (0.94%) and Ms. Rupal Gupta (1%)

were the promoters and persons acting in concert with the promoters. Hence, they would not

be triggering the 2% threshold set for acquirers for making a public announcement. It was

further also pointed out therein that re-issue of forfeited shares inter alia to Suncare (4.55%)

did not also trigger the 5% threshold under the Takeover Regulations.

f. However, I find that this point that Suncare was not a part of the promoters and persons acting

in concert with the promoters, which the company was trying to impress upon ASE vide the

aforesaid letter dated 15.04.1998, was directly inconsistent with the facts incorporated in the

filing made by the company with ASE/ BSE under regulation 8 of Takeover Regulations at the

relevant point of time. This is because I note from the copy of disclosures made by the

company to ASE under regulation 8 of Takeover Regulations for the years ended 31.03.1998,

31.03.1999 and 31.03.2000 that the name of Suncare and Mr. Sharad Gupta figured in the

shareholding of the promoters and body corporate disclosed to ASE for the said years. I find

here that Dr. Sunil Gupta vide letter dated 07.12.2013 has claimed that name of Suncare was

mentioned in the annual return as a ‘body corporate’ and not as a ‘promoter’. In view of the

argument made as such by Dr. Sunil Gupta on behalf of Suncare, I now proceed to examine

whether at the relevant point of time, the holding of Suncare as a body corporate was required

to be disclosed under Regulation 8(3) of the Takeover Regulations.

g. Under Regulation 8(3) of the Takeover Regulations, I note that every company whose shares

are listed on a stock exchange is required within 30 days from the financial year ending March

31, as well as the record date of the company for the purposes of declaration of dividend,

make yearly disclosures to all the stock exchanges on which the shares of the company are

listed, the changes, if any, with respect of the holdings of the persons referred to under sub-

regulation (1) and also holdings of promoters or person(s) having control over the company as

on 31st March. Under sub-regulation (1), I find that every person, including a person

mentioned in regulation (6) who holds more than 15% per cent shares or voting rights in any


company w.e.f. 28.10.1998 and who prior to the same held 10% shares or voting rights in any

company, were required within 21 days from the financial year ending March 31, make yearly

disclosures to the company in respect of their holdings as on 31st March. I further find that the

persons mentioned in regulation (6) are the promoters or persons having control over a

company or persons who held more than five per cent shares or voting rights in any company

as on the date of notification of the Takeover Regulations. Thus, I note that under regulation 8

of the Takeover Regulations, the company was required to make yearly disclosure to the

concerned stock Exchanges with respect to the holdings of the promoters or person(s) having

control over the company and also in respect of persons who held 15% shares in the company

w.e.f. 28.10.1998 & who held 10% prior to the same and also in respect of persons who held

more than 5% as on the date of notification of the Takeover Regulations i.e. 20.02.1997.

h. I note from the copy of the filing made by the company to ASE vide letters dated 25.04.1998,

30.04.1999 and 28.04.2000 that as on 31.03.1998, 31.03.1999 and 31.03.2000 respectively

there were no persons holding 10/15% shares or voting rights in the company. Besides, I note

that Suncare was holding 14,100 shares (0.47% of the total voting capital), 1,62,100 shares

(4.99% of the total voting capital) and 2,07,500 shares (6.38% of the total voting capital)

respectively as on 31.03.1998, 31.03.1999 and 31.03.2000. Thus, I note that the holding of

Suncare as a body corporate was otherwise below the threshold set under regulation 8 of

Takeover Regulations for disclosure of its holding by the company to the Exchange, unless it

was a part of the promoter(s) or person(s) having control over the company. Thus, this falsifies

the claim made by Dr. Sunil Gupta vide letter dated 07.12.2013 that Suncare was mentioned in

the annual return as body corporate and not as a promoter.

i. With this background in place, it now appears that Suncare was being distanced from the

promoter group to dilute the percentage of shareholding of the promoter group, so as to

circumvent making of the public announcement to acquire shares in accordance with the

Takeover Regulations. Further from the same, it also appears that the promoters were well

versed with the provisions of the Takeover Regulations at the relevant point of time, contrary

to the submissions made.


j. I further note that Dr. Sunil Gupta and Ms. Rupal Gupta have severally and jointly accepted full

responsibility for the information contained in the letter of Offer. The said information, I find,

has also been vetted by Manager to the Offer Vivro Financial Services Pvt. Ltd. (hereinafter

referred to as ‘Vivro’). Under the SEBI (Merchant Banking) Regulations, 1992, the Manager to

the Offer is responsible for verification of the contents of the Letter of Offer in respect of the

Offer and the reasonableness of the views expressed therein, and is required to submit to the

Board at least two weeks prior to the opening of the issue for subscription, a due diligence

certificate. I note that the Manager to the Offer Vivro vide due diligence certificate dated

12.10.2011 has inter alia confirmed that the disclosures made in the draft letter of Offer/final

letter of Offer are true, fair and adequate to enable the investors to make a well informed

decision. Any false or untrue certification by the Manager to the Offer would mean the risk of

suspension/ cancellation of its registration to act as a Merchant Banker. I, thus, note here that

the promoter Noticees have failed to appreciate the fact that a SEBI registered intermediary

had carried out the necessary due diligence while making the disclosures in the letter of offer.

The disclosure in the letter of Offer based on due diligence exercise conducted by a merchant

banker is evidence enough to conclude that Suncare and Mr. Sharad Gupta were also the

promoters of the company. I note here that promoter Noticees viz. Suncare and Mr. Sharad

Gupta have not questioned the validity of the due-diligence conducted by the Manager to the

Offer. The onus was on the Promoter Noticees viz. Suncare and Mr. Sharad Gupta to point out

failure/ lapse, if any, on the part of Manager to the Offer to act diligently in the matter. When

a fact is proved in affirmative or evidence is led to prove the same, the onus shifts on the other

side to negate the charge.

k. In this context, I note that in the matter of A. Raghavamma and Another v. A. Chenchamma

and Another (AIR 1964 SC 136), while making a distinction between burden of proof and onus

of proof, the Hon’ble Supreme Court has opined as follows:

“There is an essential distinction between burden of proof and onus of proof: burden of proof

lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts.

The burden of proof in the present case undoubtedly lies upon the plaintiff to establish the

factum of adoption and that of partition. The said circumstances do not alter the incidence of

the burden of proof. Such considerations, having regard to the circumstances of a particular


case, may shift the onus of proof. Such a shifting of onus is a continuous process in the

evaluation of evidence.”

l. I find further that the Promoter Noticees Suncare and Mr. Sharad Gupta at the relevant point

of time did not deny such information which was in public domain. Thus, I find no reason to

disbelieve the fact stated in the letter of Offer that Suncare and Mr. Sharad Gupta were

amongst the promoters and persons acting in concert with the promoters at the relevant point

of time along with the acquisitions shown against their names.

m. From all of the above, on preponderance of the facts before me, I conclude that Suncare was a

promoter of the company at the relevant point of time and the argument now made by Dr.

Sunil Gupta in reply to the SCN and pursuant to the personal hearing that Suncare was never a

part of the promoters of the company is with a view to dilute the percentage of shareholding,

which is reckoned in the acquisition of shares by the promoters and the promoter group for

the period 1997-2000 for consideration for public announcement.

n. I note further that the expression promoter has inter alia been defined in regulation 2(1)(h) to

include a relative of the promoter within the meaning of section 6 of the Companies Act, 1956.

Thus, by virtue of being the brother of Dr. Sunil Gupta, I find that Mr. Sharad Gupta becomes

the promoter of the company. Vide letter dated 05.11.2013 Mr. Sharad Gupta had disputed

the fact that he was a promoter of the company and claimed that he had been listed as a

promoter, without his prior knowledge in the filings made by the company. In view of the

same vide email dated 14.03.2014, Mr. Sharad Gupta was advised to inform the steps

(Civil/Criminal) taken, if any, by him against Dr. Sunil Gupta or the Company before any

Court/Police Station/any Other Authority, etc., for including his name as a Promoter of the

company from 1997 to 2011 without his knowledge. In response vide email dated 20.03.2014,

Mr. Sharad Gupta inter alia submitted that he was aware that on purchasing the shares of the

company he became a deemed promoter of the company, in view of Regulation 2(h)(2) of the

Takeover Regulations.


o. From all of the above, I conclude that Promoter Noticee Group viz. Dr. Sunil Gupta, Ms.

Rupal Gupta, Dr. Sunil Gupta (HUF), Suncare, Mr. Sharad Gupta, Mr. Mayur Parikh, Mr.

Ashok C Gandhi, M/s. Karan Holdings Pvt. Ltd. and M/s. Anik Holdings Pvt. Ltd. were the

promoters of the company at the relevant point of time.

26. The second issue for consideration is whether the Promoter Noticee Group viz. Dr. Sunil Gupta,

Ms. Rupal Gupta, Dr. Sunil Gupta (HUF), Suncare, Mr. Sharad Gupta, Mr. Mayur Parikh, Mr. Ashok

C Gandhi, M/s. Karan Holdings Pvt. Ltd. and M/s. Anik Holdings Pvt. Ltd. were persons acting in

concert as defined under regulation 2(1)(e) of the Takeover Regulations?

a. I note that a person acting in concert (hereafter referred to as ‘PAC') is defined under

regulation 2(1)(e) of the Takeover Regulations as persons who, for a common objective or

purpose of substantial acquisition of shares or control, pursuant to an agreement or

understanding (formal or informal), directly or indirectly co-operate by acquiring shares or

control over a company. Additionally, the Takeover Regulations specifies certain persons to be

deemed persons acting in concert with other persons unless the contrary is established.

b. Besides, I also note that the Hon’ble Securities Appellate Tribunal (SAT) vide Order dated

01.06.2012 in the matter Mr. Rajesh Toshniwal Vs. SEBI and Others has observed that:

“…..It is the basic principle of corporate law that promoter group is a homogenous class.

It is the normal practice to club the entire promoter group into one class unless otherwise

proved by the acquirer.....”

“......The promoters, as a rule, belong to a homogenous group unless otherwise proved by

attendant circumstances to be otherwise…………….. It is a matter of record that the

shareholding of the entire promoter group was always disclosed as a group holding to

the regulators. In the public announcement document also the shareholding of the entire

promoters group is specifically grouped together.....”

“......In the case of K.K. Modi, again relied upon by the appellant, the shareholders were

admittedly a divided house. In the present case the various statements furnished by the

promoter group and the conduct of the parties show that they acted together. Perhaps


the appellant has introduced the above argument with a view to diluting the percentage

of shareholding which is reckoned in the acquisition of shares and consideration for

public announcement. We cannot appreciate the stand taken by the appellant in this

regard.”

c. I find that Dr. Sunil Gupta vide letter dated 07.12.2013 has admitted that he together with his

wife Ms. Rupal Gupta and Dr. Sunil Gupta (HUF) were acting in concert with each other. Also,

there does not appear any dispute to the fact that the promoters viz. Mr. Mayur Parikh, Mr.

Ashok C Gandhi, M/s. Karan Holdings Pvt. Ltd. and M/s. Anik Holdings Pvt. Ltd. too were acting

in concert with the promoters.

d. I, however, find it has been stated on behalf of Suncare that it was not acting in concert with

the promoters. It has also been submitted that the performance of the company suffered

badly during the initial years and the company was incurring losses in that period which had

impacted its performance till the financial year 1999-2000. Despite the same, I find that

Suncare was one of the entities along with Dr. Sunil Gupta and Ms. Rupal Gupta who infused

the much required funds in the company by way of allotment/re-issue of forfeited shares on

30.06.1998. I note that out of the total of 2,54,700 forfeited equity shares that were re-issued

for the purpose, 1,48,000 shares were allotted/ re-issued to Suncare. Thus, I note that more

than 50% of the funds for the purpose came for Suncare alone. Again in 1999-00, I note that

Suncare was a part of the promoter’s efforts of sending positive signal to the market to boost

the investors’ confidence by purchasing shares of the company from the secondary market. As

has been brought out earlier, it is reiterated that the letter of Offer dated 23.01.2012, wherein

Dr. Sunil Gupta and Ms. Rupal Gupta have severally and jointly accepted full responsibility for

the information and for which Due Diligence Certificate dated 12.10.2011 has been submitted

by the Manager of the Offer Vivro to SEBI, declares Dr. Sunil Gupta as the promoter and

Director of Suncare, Ms. Rupal Gupta as the promoter of Suncare and includes the

shareholding of Suncare amongst the promoters and persons acting in concert with the

promoters of the company for the relevant period. Besides, I note that the aforesaid facts have

never been disputed by Suncare, except after the issue of SCN. Thus, in view of the aforesaid,

and preponderance of all the facts before me and brought out in the preceding paras, I find


that Suncare, who was one of the promoters of the company at the relevant point of time, was

acting in concert with the promoters.

e. I note further that though Mr. Sharad Gupta has claimed that he was a deemed promoter, but,

not a person acting in concert with his brother Dr. Sunil Gupta. From the available information

on record as per the filing made by the company with the stock Exchange and as stated in the

letter of Offer dated 23.01.2012, I find that Mr. Sharad Gupta had acquired 19,500 shares

(0.65%) in the year 1997-98 and 53,300 shares (1.64%) in the year 1999-00. As per the claim

made by Mr. Sharad Gupta, he had acquired 65,500 shares, and that too in the year 2000, vis-

a-vis 72,800 shares shown against his name as above as per the letter of Offer and on the BSE

website. Vide email dated 27.03.2014, Mr. Sharad Gupta was advised to provide the details of

acquisitions/ sale such as on-market/ off-market etc. and the details of the broker/ sub-broker

through whom he had traded during the period in the scrip of M/s. Bloom Dekor Ltd. (the

company). As per reply email dated 28.03.2014, Mr. Sharad Gupta has stated that he had

placed an order for a total of 65,900 shares (on-market), of which 400 shares came under bad

delivery, so a total of 65,500 shares were finally transferred in his name. Vide the said email,

Mr. Sharad Gupta has further provided the details of the transactions carried out by him

during the period 1997-2000 as given below:

S. No. Date of Invoice Quantity of Shares

1 16.01.2000 6,500

2 22.01.2000 5,800

3 29.01.2000 10,400

4 11.03.2000 43,200

65,900

f. Mr. Sharad Gupta vide the said email has further stated that these shares were purchased

from the market, on his instructions by M/s. Sampat Trading Company, Rajkot (hereinafter

referred to as ‘Sampat’), who at the time was a sub-broker of a BSE stock broker. He has

further added that as per prevailing business practice, Sampat used to issue one invoice per

week for all trades conducted in that week. Vide the said email, Mr. Sharad Gupta has once

again reiterated that he no longer has any contract notes, broker’s ledger or any other proof of


purchases pertaining to these transactions because of long duration of the time involved. Mr.

Sharad Gupta has provided the extracts from his ledger account concerning Bloom Dekor Ltd.

(the company) and transactions with Sampat which were duly verified for the purposes of

Income Tax Returns by M/s. Trushit Choksi and Associates, who was his Chartered Accountant

at the relevant point of time. Vide email dated 28.03.2014, Mr. Sharad Gupta further stated

that he was unaware as to under which stock broker, Sampat operated as a sub-broker. Mr.

Sharad Gupta further claimed that no off-market transactions were undertaken by him in the

company’s scrip during 1997-2000 period.

g. I further note that vide email dated 20.03.2014, Mr. Sharad Gupta has claimed that the

purpose of his submissions made to the effect that he was listed as a promoter of the company

without his prior knowledge was to demonstrate that although he was a 'deemed' promoter,

he neither engaged in any activities as a promoter, nor, did he engage in any concerted action

to buy shares along with his brother/ his associates as alleged in the SCN. He has stated that

although he was a deemed promoter during the impugned period, it was neither his intention,

nor action, to acquire shares in the company 'in concert' with his brother. Vide the said email,

Mr. Sharad Gupta has further stated that his reference to the filing being made without his

knowledge was only to indicate that he was so unconnected with the affairs of his brother's

company that he was unaware of his status throughout this period, and only discovered it after

the proceedings commenced.

h. Contrary to the submissions of Mr. Sharad Gupta made as above, it was observed that Mr.

Sharad Gupta’s name figured as promoter and person acting in concert with the promoters

with a holding of 19,500 shares for the year 1997-98 in the disclosures made by the company

to the Exchange vide letter dated 25.04.1998 under regulation 8. The said disclosure made by

the company to the Exchange was, hence, emailed to Mr. Sharad Gupta seeking his comments

on the same. In response, Mr. Sharad Gupta has stated that he forwarded the said details to

his brother Dr. Sunil Gupta by email and asked him to clarify the position. Mr. Sharad Gupta

vide email dated 04.04.2014 has stated that his brother made enquiries with his share transfer

agent and informed him that the following data is available in the company’s records with

respect to the transactions as covered by company’s letter dated 25.04.1998 which have

occurred after 01.04.1997:


TSRNO

transfer

deed no

SDATE

system

entry date

FDATE

transfer

deed date

TDATE

purchase

date with

stamp

MDATE

company

meeting

date

SHARE AMOUNT POST

stamp

SFOLIO

seller

folio no

SCRTNO

certificate

no

SDIST start

distinctive

no

EDIST end

distinctive

no

BFOLIO

buyer

folio

S04380

25444 02/09/98 22/07/98 22/07/98 25/08/98 100 4.00 2.00 S04380 28129 2812801 2812900 J02026

SOLD

S04382

23461 04/07/97 19/03/97 12/06/97 07/07/97 100 4.00 2.00 S04382 11446 1144501 1144600 M04027 AHMEDABAD

24474 07/11/97 20/12/96 20/12/96 10/11/97 100 2.60 1.50 S04382 13313 1331201 1331300 C01620 BARODA

25423 02/09/98 22/07/98 22/07/98 25/08/98 100 16.00 8.00 S04382 10500 1049901 1050000 J02026

25423 02/09/98 22/07/98 22/07/98 25/08/98 100 16.00 8.00 S04382 10515 1051401 1051500 J02026

25423 02/09/98 22/07/98 22/07/98 25/08/98 100 16.00 8.00 S04382 25034 2503301 2503400 J02026

25423 02/09/98 22/07/98 22/07/98 25/08/98 100 16.00 8.00 S04382 27662 2766101 2766200 J02026

SOLD

S04383

23611 30/07/97 03/04/97 03/04/97 02/08/97 100 16.00 8.00 S04383 24807 2480601 2480700 H01976 MUMBAI

23611 30/07/97 03/04/97 03/04/97 02/08/97 100 16.00 8.00 S04383 24843 2484201 2484300 H01976 MUMBAI

23611 30/07/97 03/04/97 03/04/97 02/08/97 100 16.00 8.00 S04383 24861 2486001 2486100 H01976 MUMBAI

23611 30/07/97 03/04/97 03/04/97 02/08/97 100 16.00 8.00 S04383 24073 2407201 2407300 H01976 MUMBAI

23613 30/07/97 03/04/97 03/04/97 02/08/97 100 20.00 10.00 S04383 20752 2075101 2075200 S04888 MUMBAI

23613 30/07/97 03/04/97 03/04/97 02/08/97 100 20.00 10.00 S04383 24686 2468501 2468600 S04888 MUMBAI

23613 30/07/97 03/04/97 03/04/97 02/08/97 100 20.00 10.00 S04383 24168 2416701 2416800 S04888 MUMBAI

23613 30/07/97 03/04/97 03/04/97 02/08/97 100 20.00 10.00 S04383 24281 2428001 2428100 S04888 MUMBAI

23613 30/07/97 03/04/97 03/04/97 02/08/97 100 20.00 10.00 S04383 24092 2409101 2409200 S04888 MUMBAI

24675 13/02/98 12/12/97 12/12/97 16/02/98 100 3.00 1.50 S04383 17626 1762501 1762600 M04041 AHMEDABAD

SOLD

S04386

25424 02/09/98 22/07/98 22/07/98 25/08/98 100 4.00 2.00 S04386 10217 1021601 1021700 J02026

SOLD

S04535

24812 18/07/99 02/01/98 15/07/98 20/01/98 100 4.00 2.00 S04535 23035 2303401 2303500 S04503


i. No inference can be drawn from data submitted as aforesaid. There are no details of the

transferor(s) or the transferee(s) either. Besides, no documental proof in support has been

provided. Also, prima facie the data appears to be in respect of transfer of some 1,900 shares

only, whereas holding of Mr. Sharad Gupta as per letter dated 25.04.1998 sent to the

Exchange indicates Mr. Sharad Gupta’s holding for the year 1997-98 to be 19,500 shares.

j. Further, I note that instead of seeking clarification directly from the company, Mr. Sharad

Gupta preferred to take the assistance of his brother Dr. Sunil Gupta in the matter, despite

claiming that they were estranged. Further, I find that Dr. Sunil Gupta instead of referring him

to the company/ Share Transfer Agent, wilfully himself made enquiries on behalf of his brother

with the Share Transfer Agent. This conduct of Mr. Sharad Gupta and Dr. Sunil Gupta clearly

negates the claim of Mr. Sharad Gupta that they were estranged and not on talking terms with

each other. Besides, the authenticity of the aforesaid data is not known. I therefore do not

take the same on record for the purpose of the instant proceeding. In fact, Mr. Sharad Gupta

has himself vide email dated 04.04.2014 stated that the aforesaid details do not match with

the records in his personal ledger.

k. It was noted that Mr. Sharad Gupta had claimed that he had purchased shares of the company

during 1997-2000 through Sampat, a sub-broker of BSE stock broker, however, he did not have

the contract notes, broker’s ledger or any other proof of purchases pertaining to his

transactions because of long duration of the time involved. Hence, BSE was requested to

confirm the transactions of shares by Mr. Sharad Gupta in the scrip of M/s. Bloom Dekor Ltd.

(the company) during the period 1997-2000. BSE vide email dated 30.04.2014 clarified that as

per the records maintained by the Exchange, the entity bearing the name M/s. Sampat Trading

Company was not found to be registered as a sub-broker to any trading member of the

Exchange during the period 1997-2000. In view of the same, comments of Mr. Sharad Gupta

were called on the BSE’s response as aforesaid vide email dated 02.05.2014. In response vide

email dated 05.05.2014, Mr. Sharad Gupta has inter alia claimed that it may have been

possible that Sampat was unregistered at the time of the concerned transactions, as in 2000

sub-brokers were not mandated to be registered with SEBI and it was only in 2006 by SEBI


(Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2006 that compulsory

registration was introduced. He has further stated that the company was listed on both ASE

and BSE at the relevant point of time and his records do not show which Exchange the trades

were conducted on and it is possible that the shares were procured on ASE.

l. It becomes strikingly obvious from all of the above that Mr. Sharad Gupta has been frequently

changing his versions when countered with facts. Besides, I find it interesting to note that Mr.

Sharad Gupta despite having been a stock broker of ASE and sub-broker of BSE, himself

transacted through an unregistered sub-broker.

m. Even going by Mr. Sharad Gupta’s claim, I note that he has acquired shares in the year 2000.

Thus, I find that the extant case is unlike the case of K.K. Modi Vs. SAT referred to by Mr.

Sharad Gupta, wherein the facts of the case had clearly established that though M/s. Modipon

Ltd. was a co-promoter of M/s. Modi Rubber Ltd.(MRL), it did not share the common objective

or purpose of the acquirers in as much as it was not interested in acquiring further shares, but,

on the contrary, was interested in selling off its shareholding in MRL with a view to meet its

financial obligations. On the contrary, I note that in the extant case Noticee Mr. Sharad Gupta

who was a part of the promoter group was also at the relevant point of time interested in

acquiring shares in the company. It was not also as if that Mr. Sharad Gupta was a dormant

promoter. Though Mr. Sharad Gupta has claimed that his acquisitions were for investment

purpose and not for acquiring control of the company, I find the Takeover Regulations does

not distinguish acquisitions made by a promoter for investment purpose from that made for

acquiring control/ consolidation. I note that the Takeover Regulations lays down the limits

beyond which disclosures have to be made and the thresholds beyond which public

announcement to acquire shares in accordance with the Regulations have to be made, without

distinguishing between acquisitions made for investment purpose from acquisitions made

from control/ consolidation.

n. It is also pertinent to note here that in the matter of Modi Spinning & Weaving Mills Co. Ltd.,

referred by Mr. Sharad Gupta, the Hon’ble SAT has also held that:


“......If a promoter acquires or agrees to acquire shares or voting rights or gains control over

the target company he can be safely considered as an acquirer who in turn would be subject to

the provisions of regulation 11. Likewise a promoter can be a person acting in concert provided

he is found to cover within the scope of the definition under regulation 2(1)(e). Whether a

promoter is also an acquirer or person acting in concert would depend on the facts of each

case. It is to be noted that there is no blanket prohibition on the promoters acquiring shares

etc. in the company. In fact regulation 11 impliedly recognises the promoters’ right to acquire

further shares. However, in the instant case it is clear that the Appellant, even though could be

considered as a promoter, cannot be considered as an acquirer or person acting in concert with

the acquirer for the simple reason that the Appellant is not making any acquisition of shares

but is selling its existing shareholding. A person, who is selling his shareholding cannot be

considered as an acquirer by any standard.....”

o. In the extant case, I find that the case of Mr. Sharad Gupta that he was not acting in concert

with the promoters must preponderate so sufficiently so as to satisfy a finding in his favour,

especially in view of the fact that he too has admitted to have acquired shares during the

period. However, other than Mr. Sharad Gupta’s own submissions to the effect that - he was

estranged from his brother since 1990; that he had separated from the family; that he was not

on speaking terms with his brother Dr. Sunil Gupta; that he was unaware of actions and

investments that Dr. Sunil Gupta and his family/ acquaintances made; that he was not within

knowledge of the transactions between 1998-2000; that he was not involved in the

management or promotion of the company; that there was no formal or informal agreement

to acquire shares in the company together; that his purchase of shares was for investment

purposes only; and that he had no intention to either control the company or acquire shares in

contravention of Takeover Regulations, - there is nothing in support of Mr. Sharad Gupta’s

claim that he was not acting in concert with the then promoters. In such a scenario I am unable

to rely on the mere ipse dixit of the Noticee Mr Sharad Gupta.

p. Mr. Sharad Gupta, I find, has claimed that as per the income tax practice, records of last 8

years only were maintained by him. Though, Mr. Sharad Gupta may not be required to

maintain records as per Income Tax laws, however, there nothing on record to support a


finding that he was not acting in concert with his brother and the other promoters in the

company despite being a part of the promoter group and investing Rs. 7 lacs in the company at

the relevant point of time as per his own admission.

q. As per Mr. Sharad Gupta’s email dated 20.03.2014, I note that there is no dispute from his side

with regards to the fact that he was a part of the promoter group at the relevant point of time.

I find that the Hon’ble SAT vide Order dated 01.06.2012 in the matter Mr. Rajesh Toshniwal Vs.

SEBI and Others has held that it is a normal practice to club the entire promoter group into one

class unless otherwise proved by the acquirer. In the extant case, I find that Mr. Sharad Gupta

was aware of the fact that he was a ‘deemed promoter’ of the company. Despite the same, he

ignored to go through the Exchange website to verify the details that were put in public

domain by the company. This cannot be considered in his defense, especially when Mr. Sharad

Gupta was a broker of ASE and sub-broker of BSE himself. Mr. Sharad Gupta, hence, cannot

after more than a decade, dispute his acquisitions which have already been in public domain

for such a long time, and claim that he has no records to prove otherwise. Further, I do not

find any reason to disbelieve the data filed by the company with the stock Exchanges at the

relevant point of time. I find that the said data was also a part of the letter of Offer, which too

was a public document. I find that Mr. Sharad Gupta did not make any attempt to dispute the

said data at this stage either. Thus, I note that it was only after the issue of SCN that Mr.

Sharad Gupta claimed that he had not acquired shares in 1997-98, and, disputed the actual

acquisitions made by him during the period 1997-2000 vis-à-vis the information that was

available in public domain. I find further that the conduct of Mr. Sharad Gupta was in sync with

other promoters, who too had bought shares in small lots from the open market at the

relevant point of time. Thus, on preponderance of facts and documents before me, I find that

the act of Mr. Sharad Gupta of acquiring shares by investing Rs.7 lacs in the company, way

back during the 1997-2000 period, demonstrates well that he was acting in concert with the

other promoters of the company.

r. Thus, from the information available before me and the aforesaid discussion, I conclude that

Suncare and Mr. Sharad Gupta were the promoters of the company and also persons acting

in concert with the other promoter Noticees of the Promoter Noticee Group viz. Dr. Sunil


Gupta, Ms. Rupal Gupta, Dr. Sunil Gupta (HUF), Mr Mayur Parikh, Mr Ashok C Gandhi, M/s.

Karan Holdings Pvt Ltd and M/s. Anik Holdings Pvt Ltd at the relevant point of time.

27. Next we move on to the issue of whether the Promoter Noticee Group violated Regulation 11(1)

read with 14(1) of the Takeover Regulations. I observe that there are four transactions viz.

acquisition of 3,25,000 shares in 1997-98, acquisition of 64,210 shares in 1997-98, acquisition of

2,29,800 shares in 1998-99 and acquisition of 4,07,700 shares in 1999-00, whereby the Promoter

Noticee Group has been alleged to have violated Regulation 11(1) read with regulation 14(1) of

the Takeover Regulations.

a. With respect to the alleged acquisition of 3,25,000 shares and acquisition of 64,210 shares in

1997-98 in violation of Regulation 11(1) read with regulation 14(1) of the Takeover

Regulations:

i. As regards the alleged acquisition of 3,25,000 shares, I note from the letter of Offer

dated 23.01.2012 that in the year 1997-98, Dr. Sunil Gupta (1,85,000 shares), Ms Rupal

Gupta (70,000 shares) and Dr. Sunil Gupta(HUF) (70,000 shares) together with other

promoters viz. Mr. Sharad Gupta, late Mr. Ramesh Shah, M/s. Suncare Traders Ltd., Mr.

Ashok C Gandhi, M/s. Anik Holdings Pvt. Ltd., Mr. Mayur Parikh and M/s. Karan Holdings

Pvt. Limited had purchased 3.25 lac shares from GVFL vide proposal and acceptance

letter dated 24.04.1997 at Rs. 7/- per share.

ii. I note that the Promoter Noticee Group subsequent to the issue of Supplementary SCN

has contended that in April 1997 only Dr Sunil Gupta, Dr Sunil Gupta HUF and Ms Rupal

Gupta acquired 3,25,000 shares from GVFL and none of the other promoters had

acquired shares of the company. I find from the replies and submissions made before

me that since GVFL started pressurizing the promoters to agree to buy back the shares

held by GVFL, as the said shares were under lock-in till July, 1998 as per the

shareholders' Agreement, the promoters had to purchase all the shares in a single lot at

a price agreed between the promoters and GVFL. In fact, it is noted that vide letter dated

08.04.1997, it was proposed to GVFL by Dr. Sunil Gupta that any of his promoter group

would buy back 3.25 lac equity shares of Rs. 10/-each at Rs. 7/- per share with bullet


payment, or at Rs. 8.25 per share in equal installments spread over a period of 18

months. This clearly brings out the fact that the entire Promoter Group was acting in

concert.

iii. It is noted further from the Annual Report of the company of 1997-98 that the paid-up

capital of the company was 29,95,200 shares of Rs.10/- each (excluding the forfeited

shares), thus, the acquisition of 3,25,000 shares (10.85%) as aforesaid triggered

Regulation 11(1) of the Takeover Regulations by the Promoter Noticee Group, since the

limit for acquiring additional shares under Regulation 11(1) of the Takeover Regulations

as prevalent at the relevant point of time without making public announcement was 2%

of the voting rights in any period of 12 months. However, no public announcement was

made. Hence, the Promoter Noticee Group violated Regulation 11(1) read with 14(1) of

the Takeover Regulations in 1997-98. It is, however, reiterated that the adjudication

proceedings in respect of promoter late Mr. Ramesh Shah, however, have already been

disposed of vide Adjudication Order dated 31.12.2013 as the matter became infructuous

on account of his death on 04.10.2013.

iv. I note here that it has submitted that later on SEBI had come out with an amendment

w.e.f. 30-12-2000 exempting transfer of shares pursuant to an agreement between

venture capital fund and promoters of the company. I, however, note that at the

relevant point of time, the acquisition did not attract any exemption from making a

public announcement under the Takeover Regulations. Besides, I note that such

exemption is for Venture Capital Funds registered with SEBI, whereas GVFL at the

relevant point of time was not registered with SEBI. Hence, I find that the said argument

too does not hold any merit.

v. As regards the balance alleged acquisition of 64,210 shares, it was initially submitted

that the same was purchased from open market in small lots, within the permissible

exempt limits and represented 1.97% of the total capital of the company.

vi. I note here that Dr. Sunil Gupta in addition to 1,85,000 shares acquired from GVFL as

aforesaid, had also purchased 30,600 shares from open market in the year 1997-98. This

together with the shares acquired by Suncare (14,100 shares), Mr. Sharad Gupta (19,500


shares) and late Mr. Ramesh Shah (10 shares) constituted the balance 64,210 shares

acquired from open market in 1997-98, together with other promoters viz. Ms. Rupal

Gupta, Sunil Gupta HUF, Mr. Ashok C Gandhi, M/s. Anik Holdings Pvt. Ltd., Mr. Mayur

Parikh and M/s. Karan Holdings Pvt. Ltd..

vii. I note here that the Promoter Noticee Group has reiterated that Suncare and Mr. Sharad

Gupta were not the Promoters of the company, and if shares acquired by them were

excluded out of 64,210 shares alleged to have been acquired by the Promoter Noticee

Group in 1997-98 from the open market, the shares acquired would become 30,610

shares i.e. 1.02% of the paid up capital of the company, and at the relevant point of

time, limit for the trigger of Regulation 11(1) was more than 2%. This argument, I find, is

in direct contradiction to their immediate earlier submission, wherein it was stated that

64,210 shares represented 1.97% of the total capital of the company, thus, the holding

of Suncare and Mr. Sharad Gupta was also considered and compared with the

subscribed capital of 32,50,000 shares, instead of considering the paid up capital of

29,95,500 shares.

viii. From the above, I note that the Promoter Noticee Group has been contradicting its own

statements even at the adjudication stage, which appears to be with a view to dilute the

percentage of shareholding which is reckoned in the acquisition of shares for

consideration of public announcement. Moreover, it has already been established in the

preceding paras of the Order that Suncare and Mr. Sharad Gupta were the Promoters of

the company, who were acting in concert with the promoter group at the point of time.

Hence, shares acquired by Suncare and Mr. Sharad Gupta have to be included in the

shares acquired by the Promoter Group in 1997-98 through open market.

ix. Further, as has been brought out above, the paid-up capital of the company was

29,95,200 shares of Rs.10/- each (excluding the forfeited shares), thus, the acquisition of

balance 64,210 shares constituted 2.14% of the paid-up capital of the company and the

limit for acquiring additional shares under Regulation 11(1) of the Takeover Regulations

as prevalent at the relevant point of time was 2% in any period of 12 months without

making public announcement. However, no public announcement was made. I have here


taken note of the submission made by the Promoter Noticee Group that they had

erroneously assumed that the total paid up capital as on 31.03.1998 was 32,50,000

shares for the Financial Year 1997-98 while arriving at the percentage of 1.97%, and that

they did not want to mislead.

x. From all of the above, I find that in the year 1997-98, regulation 11(1) was triggered

twice by the Promoter Noticee Group – first on acquisition of 3,25,000 shares from GVFL

and again when 64,210 shares were acquired through open market. I, thus, conclude

that the Promoter Noticee Group viz Dr. Sunil Gupta, Ms Rupal Gupta, Dr Sunil Gupta

(HUF), Suncare, Mr Mayur Parikh, Mr Ashok C Gandhi, M/s. Karan Holdings Pvt. Ltd.,

M/s. Anik Holdings Pvt. Ltd. and Mr. Sharad Gupta, had violated the provisions of

Regulation 11(1) read with 14(1) of the Takeover Regulations twice in the year 1997-

98.

b. With respect to the alleged acquisition of 2,29,800 equity shares (7.12%) in 1998-99 by the

Promoter Noticee Group in violation of Regulation 11(1) read with regulation 14(1) of the

Takeover Regulations:

i. The alleged acquisition by Ms. Rupal Gupta (18,800 shares) from open market on

10.04.1998 together with other promoters viz. Dr. Sunil Gupta, Dr. Sunil Gupta HUF, Mr.

Sharad Gupta, late Mr. Ramesh Shah, M/s. Suncare Traders Ltd., Mr. Ashok C Gandhi,

M/s. Anik Holdings Pvt. Ltd., Mr. Mayur Parikh and M/s. Karan Holdings Pvt. Ltd. and

reissue/ allotment of forfeited shares at Rs. 6/- per shares on 30.06.1998 to M/s.

Suncare Traders Ltd. (1,48,000 shares), Dr. Sunil Gupta (30,500 shares) and Ms. Rupal

Gupta (32,500 shares) together with other promoters viz. Dr. Sunil Gupta HUF, Mr.

Sharad Gupta, late Mr. Ramesh Shah, Mr. Ashok C Gandhi, M/s. Anik Holdings Pvt. Ltd.,

Mr. Mayur Parikh and M/s. Karan Holdings Pvt. Ltd. resulted in total acquisition of

2,29,800 equity shares by the Promoter Noticee group i.e. 7.12% during the 12 months

from the date of first transaction.

ii. I find that the Promoter Noticee Group has again reiterated here that since Suncare was

not a promoter of the company, hence purchase of 1,48,000 shares during 10.04.1998 to


30.06.1998 cannot be included in acquisition under Regulation 11(1), hence, the correct

number of shares acquired under regulation 11(1) during the said period was 81,800

shares (2,29,800 – 1,48,000) i.e. 2.52% of 32,50,000 shares. In the matter, it has been

clearly brought out in the earlier paras that Suncare was a part of the promoter group

acting in concert with the promoters. I further find it pertinent to reiterate here that out

of the total of 2,54,700 forfeited equity shares that were re-issued for the purpose,

1,48,000 shares were allotted/ re-issued to Suncare i.e. more than 50% of the funds for

the purpose came for Suncare alone, despite the extreme difficult financial condition of

the company at the point of time. In view thereof, the argument made by the Promoter

Noticee Group does not hold any merit.

iii. I note that the limit for acquiring additional shares under Regulation 11 (1) of the

Takeover Regulations as prevalent at the relevant point of time was 2% in any period of

12 months without making public announcement. Thus, the acquisitions as aforesaid


However, no public announcement was made.

iv. I, thus, conclude that the Promoter Noticee Group, viz Dr. Sunil Gupta, Ms Rupal

Gupta, Dr Sunil Gupta (HUF), Suncare, Mr Mayur Parikh, Mr Ashok C Gandhi, M/s.

Karan Holdings Pvt. Ltd., M/s. Anik Holdings Pvt. Ltd. and Mr. Sharad Gupta, had

violated the provisions of Regulation 11(1) read with 14(1) of the Takeover Regulations

in the year 1998-89.

c. With respect to the alleged acquisition of 4,07,700 equity shares (12.54%) by the Promoter

Noticee Group in 1999-00 violation of Regulation 11(1) read with regulation 14(1) of the

Takeover Regulations:

i. I note that it has been alleged that Ms. Rupal Gupta, Dr. Sunil Gupta, Dr. Sunil Gupta

(HUF), Suncare and Mr. Sharad Gupta had respectively acquired 28,200 shares (0.87%),

1,86,590 shares (5.74%), 94,210 shares (2.90%), 45,400 shares (1.40%) and 53,300

shares (1.64%) from open market, together with other promoters viz. late Mr. Ramesh

Shah, Mr. Ashok C Gandhi, M/s. Anik Holdings Pvt. Ltd., Mr. Mayur Parikh and M/s.


Karan Holdings Pvt. Ltd., thus, a total of 4,07,700 shares (12.54%) during a period of 12

months from the date of the first transaction.

ii. I note that the Promoter Noticee Group has stated that the alleged acquisition of

4,07,700 shares occurred between 21.12.1998 to 31.03.2000, thus, the period of the

acquisition is 15 months and not 12 months. I do not find any merit in this argument

either as the Promoter Noticee Group has not produced any documents in support of its

said statement. Besides, the SCN/ Supplementary SCN had clearly indicated that the

acquisition of 4,07,700 shares (12.54%) had taken place during 12 months from the date

of first transaction i.e. 21.12.1998.

iii. The information as aforesaid in the SCN/ Supplementary SCN was on the basis of

disclosures made in the letter of Offer, duly vetted by Manager to the Offer Vivro. Vivro

vide due diligence certificate dated 12.10.2011 has inter alia confirmed that the

disclosures made in the draft letter of Offer/final letter of Offer are true, fair and

adequate to enable the investors to make a well informed decision. As discussed in the

preceding paragraphs of the Order, any false or untrue certification by the Manager to

the Offer would mean the risk of suspension/ cancellation of its registration to act as a

Merchant Banker. I, thus, note here that the Promoter Noticee Group have failed to

appreciate the fact that a SEBI registered intermediary had carried out the necessary due

diligence while making the disclosures in the letter of offer, and based on the same the

notices were issued. The onus was, thus, on the Promoter Noticee Group to point out

failure/ lapse, if any, on the part of Manager to the Offer to act diligently in the matter.

When a fact is proved in affirmative or evidence is led to prove the same, the onus shifts

on the other side to negate the charge. The Promoter Noticee Group has not provided

any documents in support of its claim that the acquisition of 4,07,700 shares took place

during a period of 15 months, and not 12 months as alleged. In such a scenario, I am

unable to accept on the mere ipse dixit of the Promoter Noticee Group, their contention

that the acquisition of 4,07,700 shares happened in 15 month period and discount the

statement made in the letter of offer by a registered intermediary. Moreover, I find that

the Promoter Noticees viz. Dr. Sunil Gupta and Ms. Rupal Gupta have also severally and

jointly accepted full responsibility for the information contained in the letter of Offer.


iv. I note further from the submissions that it has been submitted that being one of the

most reputed and respected promoters in the laminate industry, most of IPO equity

shares were originally subscribed by the trade partners and trade community, however,

in the event of mounting losses and subsequent erosion of share value in initial years,

the shareholders were not happy. Hence, in order to satisfy the shareholders and in

good faith, the promoters had to facilitate purchase of their shares from the open

market.

v. I find further that Mr. Sharad Gupta has stated that his acquisitions were for investment

purpose and not for acquiring control over the company. However, I note that

acquisitions made by Mr. Sharad Gupta are in sync with the acts of other promoters of

the company. A promoter acquires shares in the company for the purpose of substantial

holding of shares/voting rights/control or management of the target company. Besides, I

note that the shares have been acquired by Mr. Sharad Gupta through purchases on

market, it is not a case of direct investment of funds with the company. Mr. Sharad

Gupta has not denied the fact regarding acquisition of shares by him in the company,

though he may have claimed that there is a discrepancy in the number of shares

acquired as per the company’s records and as per his records. However, he has neither

at this point of time been able to produce any supporting documents to counter the

filing made by the company at the relevant point of time, nor, did he any time in the past

dispute the facts that were available in public domain. Hence, I am proceeding as per the

acquisitions disclosed in the letter of Offer and confirmed by the Manager to the Offer

Vivro vide due diligence certificate dated 12.10.2011 to be true, fair and adequate to

enable the investors to make a well informed decision.

vi. I note that the limit for acquiring additional shares under Regulation 11 (1) of the

Takeover Regulations as prevalent at the relevant point of time was 5% in any period of

12 months without making public announcement and Promoter Noticee Group viz Dr.

Sunil Gupta, Ms Rupal Gupta, Dr Sunil Gupta (HUF), Suncare, Mr Mayur Parikh, Mr

Ashok C Gandhi, M/s. Karan Holdings Pvt. Ltd., M/s. Anik Holdings Pvt. Ltd. and Mr.


Sharad Gupta, in the aforesaid manner had acquired 12.54% during the 12 months from

the date of first transaction.

vii. It is, thus, established without doubt that the Promoter Noticee Group failed to comply

with provisions of Regulation 11(1) read with Regulation 14(1) of Takeover Regulations

while acquiring shares of the company during the years 1997 to 2000 on the following

occasions:

Sr. No. Name of the Noticee No. of times

1 Dr. Sunil Gupta 4

2 Ms. Rupal Gupta 4

3 Dr. Sunil Gupta (HUF) 4

4 M/s. Suncare Traders Ltd. 4

5 Mr. Sharad Gupta 4

6 Mr. Mayur Parikh 4

7 Mr. Ashok C Gandhi 4

8 M/s. Anik Holdings Pvt. Ltd. 4

9 M/s.Karan Holdings Pvt. Ltd 4

28. The Hon’ble Supreme Court of India in the matter of SEBI Vs. Shri Ram Mutual Fund [2006] 68 SCL

216(SC) held that “In our considered opinion, penalty is attracted as soon as the contravention of

the statutory obligation as contemplated by the Act and the Regulations is established and hence

the intention of the parties committing such violation becomes wholly irrelevant…”. Further in the

matter of Ranjan Varghese v. SEBI (Appeal No. 177 of 2009 and Order dated 08.04.2010), the

Hon’ble SAT had observed “Once it is established that the mandatory provisions of takeover code

was violated the penalty must follow.”

29. In view of the foregoing, I am convinced that it is a fit case to impose monetary penalty under

Section 15H(ii) of the SEBI Act, which reads as under:


Section 15 H(ii)of the SEBI Act prior to SEBI (Amendment) Act, 2002 (w.e.f. 29-10-2002)

Penalty for non-disclosure of acquisition of shares and takeovers

15H. If any person, who is required under this Act or any rules or regulations made

thereunder, fails to,—

(i) ...............................; or

(ii) make a public announcement to acquire shares at a minimum price; or

(iii) .............................,

he shall be liable to a penalty not exceeding five lakh rupees.

30. While determining the quantum of monetary penalty under Section 15H(ii), I have considered the

factors stipulated in Section 15-J of SEBI Act, which reads as under:-

“15J - Factors to be taken into account by the adjudicating officer

While adjudging quantum of penalty under Section 15-I, the adjudicating officer shall

have due regard to the following factors, namely:

(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable,

made as a result of the default;

(b) the amount of loss caused to an investor or group of investors as a result of the

default;

(c) the repetitive nature of the default.

31. In view of the charges as established, the facts and circumstances of the case and the judgments

referred to and mentioned hereinabove, the quantum of penalty would depend on the factors

referred in Section 15-J of SEBI Act and stated as above. Further, under Section 15-I of the SEBI

Act, the adjudicating officer has to give due regard to certain factors which have been stated as

above while adjudging the quantum of penalty. It is noted that no quantifiable figures are

available to assess the disproportionate gain or unfair advantage made as a result of such non-

compliance by the Noticee. Further from the material available on record, it is not possible to

ascertain the exact monetary loss to the investors on account of non-compliance by the Noticee.

32. I note here that the Promoter Noticee Group failed to make the public announcement to acquire

shares in accordance with the Takeover Regulations on four (4) occasions during the period 1997-


2000. I note that this resulted in denying the statutory right of the shareholders of the company to

exit through open offer mechanism at the respective point of time. To this extent, there was loss

to the investors.

33. I note that it has been submitted that due to very fragile and poor financial condition of the

company, the company did not have the service of a full time company secretary during the period

under consideration to advise them on the proper mechanism and compliance for such actions. I

find that because professionally qualified personnel could not be appointed, the Promoter Noticee

Group cannot be absolved from the applicable compliances required to be made under the

Takeover Regulations.

34. Further, it has been stated that the promoters were always in control of the company since its

public issue and there was no such motive to gain the control over the company or deceive or

defraud the investors for undue gain. The shares acquired either from GVFL or by way of reissue of

shares or through open market were never disposed of or used for disproportionate gain to the

promoters. In the matter, I note that in Appeal No. 78 of 2014 of Akriti Global Traders Ltd. Vs.

SEBI, the Hon'ble Securities Appellate Tribunal (SAT) vide Order dated 30.09.2014 had observed

that:

“… Argument of appellant that the delay was unintentional and that the appellant has

not gained from such delay and therefore penalty ought not to have been imposed is

without any merit, because, firstly, penal liability arises as soon as provisions under the

regulations are violated and that penal liability is neither dependent upon intention of

parties nor gains accrued from such delay.”

In view of the same, the argument put forth by the Promoter Noticees that there is no

question of any disproportionate gain to the promoters, is also not relevant for the given

case.

35. The argument put forth by the Promoter Noticees that they were also not well versed with the

provisions of Takeover Regulations since the said Regulation were new at that particular point of

time too does not hold any merit as a promoter of a listed company is expected to be up-to-date

with regards to changes in the regulatory environment and should be able to seamlessly integrate

any new directive introduced by the regulator, as regulations are in public interest. Non-


compliance by the promoters undermines the regulatory objectives and jeopardizes the

achievement of the underlying policy goals.

36. Besides, I note that public announcement as envisaged under Regulation 11(1) of the Takeover

Regulations is the announcement of the open offer by the acquirers and persons acting in concert,

primarily disclosing their intention to acquire shares of the target company from the existing

shareholders, thereby giving an opportunity of exit to the public shareholders at a specified price

during a specified time. In fact, I find that the penalty provision under Section 15H(ii) of the SEBI

Act also specifically refers to failure to: “make a public announcement to acquire shares at a

minimum price”. Thus, I conclude that failure to make public announcement to acquire shares at a

minimum price is a serious matter, even if the transaction is otherwise in compliance, since the

shareholders were deprived of an exit opportunity at the relevant point of time. This providing of

an exit opportunity to the shareholders at the relevant point of time further assumes significance

in light of the submissions made that the performance of the company had suffered badly during

the time and the company had incurred losses in that period, which had impacted its performance

till the financial year 1999-2000.

37. I find that Chapter VI-A of the SEBI Act provides for Penalties and Adjudication. In particular,

Sections 15A to Section 15 H(ii) are in the form of mandatory provisions imposing penalty in

default of the provisions of the SEBI Act and Regulations. In the extant case, I find that the

violations are repetitive in nature. I note here that the Act has not included mens rea or deliberate

or willful nature of the default as a factor to be considered by the Adjudicating Officer in

determining the quantum. I find further that Section 15H(ii) of SEBI Act at the relevant point of

time provided for imposition of monetary penalty not exceeding five lakh rupees.

ORDER

38. After taking into consideration all the facts and circumstances of the case, I impose the following

penalty under Section 15H (ii) of the SEBI Act on the Promoter Noticees Group viz. Dr. Sunil

Gupta, Ms Rupal Gupta, Dr Sunil Gupta (HUF), Suncare, Mr. Sharad Gupta, Mr Mayur Parikh, Mr

Ashok C Gandhi, M/s. Karan Holdings Pvt. Ltd. and M/s. Anik Holdings Pvt. Ltd., which will be

commensurate with the violations committed by them for violation of Regulation 11(1) read with


Regulation 14(1) of the Takeover Regulations. The Promoter Noticee Group shall be jointly and

severally liable to pay the said monetary penalty.

Acquisition / Period of Violation Penalty (Rs.)

Acquisition of 3,25,000 shares (10.85%) on 24.04.1997 Rs.5,00,000/- (Rupees Five Lakh Only)

Acquisition of a total of 64,210 shares (2.14%) in 1997-98 Rs.5,00,000/- (Rupees Five Lakh Only)

Acquisition of 2,29,800 shares (7.12%) in 1998 Rs.5,00,000/- (Rupees Five Lakh Only)

Acquisition of 4,07,700 (12.54%) shares in 12 months from 21.12.1998 Rs.5,00,000/- (Rupees Five Lakh Only)

Total Rs.20,00,000/-(Rupees Twenty Lakh Only)

39. The Promoter Noticees Group shall pay the said amount of penalty by way of demand draft in

favour of “SEBI - Penalties Remittable to Government of India”, payable at Mumbai, within 45 days

of receipt of this order. The said demand draft should be forwarded to Shri Jayanta Jash, Chief

General Manager, Corporation Finance Department, SEBI Bhavan, Plot No. C – 4 A, “G” Block,

Bandra Kurla Complex, Bandra (E), Mumbai – 400 051.

40. In terms of rule 6 of the Rules, copies of this order are sent to the Noticee and also to the

Securities and Exchange Board of India.

Date: 30.11.2015 Anita Kenkare

Place: Mumbai Adjudicating Officer

BEFORE THE ADJUDICATING OFFICER SECURITIES AND … · Karan Holdings Pvt. Ltd. (PAN AABCK7548R) and...

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