CHENNAI: The Securities and Exchange Board of India (SEBI) on Friday imposed a penalty of Rs 25 crores on Holcim (India) Pvt Ltd for violation of regulations regarding acquisition of shares and take-overs.

The penalty is the highest prescribed by the SEBI Act (in cases where thrice the profit made out of failure to make open offers at a minimum price is less than Rs 25 crores).

An order passed by Amit Pradhan, Adjudicating Officer, under Sec 15-H (ii) [penalty for non-disclosure of acquisition of shares and take-overs - failure to make a public announcement to acquire shares at a minimum price] held that Holcim, the global cement major, "deliberately chose not to seek exemption under the regulations for making an open offer to shareholders of Everest Industries Ltd (EIL)" while acquiring 34.71 per cent of the shares of Associated Cement Companies Ltd.

It had been alleged that the acquisition by Holcim of 34.7 per cent of equity of ACC, which controlled 76.01 per cent of EIL, led to indirect acquisition of shares of EIL by the acquirers and that Holcim did not make the necessary public announcement as required under Regulation 11(2A) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (SAST).

Rejecting Holcim's contention that it was not obliged to make an open offer for purchase of shares of EIL, the order said it was "shocking that Holcim, by ignoring the provisions of SAST Regulations, have been able to get easy liquidity (easy money) of their shareholding in EIL. Firstly they could avoid parting with money equivalent to the value of 23.99 per cent of public shareholding in EIL, which comes to Rs 51.64 crores. Lastly they could get the liquidity of about 50 per cent of their shareholding in EIL [Everest Finvest India Pvt Ltd, which bought less than 50 per cent of EIL shares from Holcim] without complying with Regulation 11 2(2A) of SAST, when EFI gave the public offer and entered into a Transaction Agreement with Holcim for purchase of 50 per cent of its shareholding in EIL.

In another case, SEBI has imposed an adjudication penalty of Rs. 25 lakhs each on Burren Energy India Ltd. (Acquirer) and Unocal Bharat Ltd. (PAC) under Sec. 15HB of the SEBI Act, 1992, for violation of the provisions of Regulation 22(7) read with Regulation 2(1)(f) of SAST Regulations.

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