SEBI slaps ₹10-lakh fine on Tata Steel for dis­clo­sure de­lay

Is­sue per­tains to the hike in share­hold­ing in group out­fit Tin­plate Com­pany

The Hindu Business Line - - MARKET WATCH -

Cap­i­tal mar­ket reg­u­la­tor SEBI has levied a fine of ₹10 lakh on Tata Steel for de­lay in dis­clos­ing the in­crease in its share­hold­ing in Tin­plate Com­pany of In­dia, a group com­pany.

In Septem­ber 2009, Tin­plate had an­nounced rights is­sue of 4.32 crore eq­uity shares to its ex­ist­ing share­hold­ers. Along with this, it had also is­sued 1.80 crore fully con­vert­ible deben­tures in the ra­tio of 5 deben­tures for ev­ery eight eq­uity shares.

In its or­der on Thurs­day, SEBI ob­served that Tata Steel had sub­scribed to and was al­lot­ted 1.33 crore eq­uity shares and 55.46 lakh fully con­vert­ible deben­tures as part of the eq­uity and deben­ture is­suance. This apart, Tata Steel also sub­scribed to an ad­di­tional 86.73 lakh eq­uity shares and 1.17 crore fully con­vert­ible deben­tures.

Stake rises to 74.96%

Post al­lot­ment of eq­uity shares, Tata Steel’s stake in Tin­plate in­creased to 42.88 per cent from 30.82 per cent.

The com­pany was ex­pected to make dis­clo­sures about this de­vel­op­ment within two work­ing days to Tin­plate as re­quired un­der SEBI reg­u­la­tions. How­ever, Tata Steel made the dis­clo­sure, be­lat­edly on July 2, 2012.

Fur­ther, on April 1, 2011, Tin­plate again al­lot­ted 3.14 crore eq­uity shares to Tata Steel pur­suant to the rights is­sue and in terms of the let­ter of of­fer dated Septem­ber 3, 2009. This led to a fur­ther in­crease in the Tata Steel hold­ing to 59.44 per cent from 42.88 per cent. This dis­clo­sure was also de­layed and made only on May 13, 2011.

Sub­se­quently, Tata Steel’s stake in Tin­plate rose to 73.44 per cent in Septem­ber 2012 fol­low­ing an open of­fer, and fur­ther to 74.96 per cent in May 2014 pur­suant to a scheme of amal­ga­ma­tion.

Ap­peals for con­don­ing de­lay

Tata Steel sub­mit­ted to SEBI that the lapse on its part was tech­ni­cal in na­ture and the same should be con­doned or a nom­i­nal penalty im­posed on it. SEBI im­posed a ₹10-lakh fine, say­ing it is com­men­su­rate with the de­faults com­mit­ted by the com­pany.

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