The Securities and Exchange Board of India (Sebi) has rectified the penalty imposed on Samir Jain, vice chairman and managing director of Bennett, Coleman & Co (BCCL), wife Meera and four others to Rs 20 lakh from Rs 1 crore in the matter pertaining to violation of minimum public shareholding (MPS) norms in PNB Finance and Industries (PNBFIL).
“…it has been brought to the notice that, while the penalty amount has been mentioned correctly in figures, there has been an error in the penalty amount being mentioned in words,” said Sebi in a corrigendum to its earlier order.
The market regulator, in an order dated March 28, restrained the couple and two others from accessing the capital market and also barred them from holding any key managerial position at a listed company till the compliance of MPS norms.
Sebi’s action was due to alleged violation of minimum public shareholding (MPS) and wrong disclosures of promoter shareholdings by PNBFIL and CCCL, firms listed on the Calcutta Stock Exchange and holding stakes in BCCL.
BCCL is the flagship company of the Times Group, which owns prominent media brands such as newspapers ‘Times of India’, ‘Economic Times’, radio channel Radio Mirchi and TV news channel Times Now.
Sebi found connected entities holding 91.51 per cent and 94.45 per cent in PNBFIL and CCCL, respectively. Under the listing regulations, a promoter can hold a maximum of 75 per cent in a listed company.
As per Sebi’s order Samir and Meera held 16.25 per cent and 6.13 per cent stake in PNBFIL. In October 2020, Sebi issued show cause notices to Jain and others.
“Due to their non-compliance with MPS Requirement, and holding of control over shares as well as voting rights of as much as 91.51 per cent of total shareholding as well as voting rights in the company, practically no floating shares for trading and no liquidity, whatsoever, was available in the market… Due to this, the public investors were deprived of their right of price discovery of the shares of the company,” said Sebi in its order.
The regulator also pulled up the company for making wrong disclosures around their promoter shareholding.
“It has also been established that the company has repeatedly disclosed a patently false shareholding pattern thereby showing zero promoters’ shareholding and in essence, was disclosing that it does not have any promoter entity in the company. By making such false disclosures on six occasions in annual disclosures made after ending of financial years 2013-14 to 2018-19, the company has violated the provisions of SAST (Substantial Acquisition of Shares and Takeovers) Regulations, which require annual disclosure by a listed company of its promoters’ shareholding at the end of every financial year in prescribed format,” it said.