Securities Appellate Tribunal (SAT) upheld SEBI’s order against public financial institution Sicom in a case related to non-compliance with takeover norms. Market regulator SEBI, in May this year, had imposed a penalty of Rs 5 lakh on Sicom Ltd for not disclosing details with regard to acquisition of shares of Raj Oil Mills. Subsequently, Sicom had filed an appeal with SAT against SEBI’s ruling in the case and submitted that when a public financial institution acquires shares of a listed firm on invocation of pledge, it is exempted from making any disclosures. Setting aside Sicom’s submissions, SAT in an order today said that “admittedly the appellants (Sicom) have failed to make disclosures even after acquiring shares on invocation of pledge and hence, appellants cannot escape penal liability”. According to SAT norms require ‘any person’ holding shares in excess of the limits prescribed therein to make disclosures, and admittedly Sicom had acquired shares in excess of the limits prescribed. SAT held that the expression ‘any person’ was “wide enough to cover acquisition of shares by scheduled commercial banks/public financial institution on invocation of pledge” and therefore Sicom had violated the disclosure norms.
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