SEBI slaps ₹10-lakh fine on Tata Steel for disclosure delay
Issue pertains to the hike in shareholding in group outfit Tinplate Company
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.