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1.
passed an interim order dated June 04, 2013 (hereinafter referred to as "the interim order")
with respect to 105 listed companies who did not comply with the Minimum Public
Shareholding ("MPS") norms as stipulated under rules 19(2)(b) and 19A of the Securities
Contracts (Regulation) Rules, 1957 (hereinafter referred to as "SCRR") within the due date
i.e., June 03, 2013. The interim order was passed without prejudice to the right of SEBI to
take any other action, against the non-compliant companies, their promoters and/or directors
or issuing such directions in accordance with law. The interim order was to be treated as a
show cause notice by those companies for action contemplated in paragraph 18 thereof.
2.
company against whom the interim orderwas passed. The equity shares of the Company are
listed on the Bombay Stock Exchange Limited (BSE) and the Ahmedabad Stock Exchange
Limited (ASE).
3.
The interim order was forwarded to the Company at its registered address vide SEBIs
letter dated June 05, 2013. However, the letter had returned undelivered with reason office
closed. Thereafter, a personal hearing in the matter was scheduled on July 30, 2014, which
was sought to be intimated to the Company vide SEBIs letter dated June 17, 2014. However,
this letter too returned undelivered. Thereafter, vide email dated May 27, 2015, SEBI
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informed the Company regarding the personal hearing fixed on July 03, 2015. However, there
was no response to the communication nor the Company appeared on the said date of
hearing.
4.
SEBI, vide letters dated October 01, 2015, again sought to serve the interim order on
the Company and its directors, Mr. Ravi Bhushan Verma, Mr. Jagesh Kumar Gupta and Mr.
Sushil Kumar. However, this letter was served on only Mr. Jagesh Kumar Gupta. However,
he did not submit any response. As the interim order could not be served on the Company
and two of its directors, SEBI made a public notice in newspapers (Times of India,
Ahmedabad dated February 23, 2016 and in Sandesh (all editions in Gujarat) dated March 06,
2016) regarding the proceedings initiated vide the interim order. The public notices informed
the Company that it can collect the interim order from the offices of SEBI and may also
appear in the personal hearing that was scheduled on March 29, 2016. Despite these public
notices, neither the Company nor its directors/promoters appeared in the said personal
hearing. I, accordingly find that it would be futile to afford further opportunities to the
noticees and therefore proceed to consider the case on merits on the basis of material on
record. It is also noted that vide order dated July 17, 2012 (in Case No. 208/1988), the Board
for Industrial and Financial Reconstruction (BIFR) had deregistered the Company on the
grounds that the Company has permanently lost its industrial character and also for nonprosecution.
5.
I have considered the interim order passed in the matter against the Company, its
promoters and directors and other material available on record. The interim order was issued
against the Company as it failed to maintain the minimum public shareholding of 25% as
mandated under rule 19A of the SCRR and Clause 40A of the Listing Agreement read with
section 21 of the Securities Contract (Regulation) Act, 1956 ("SCRA"). The last disclosure of
the Company in BSE with respect to its Shareholding Pattern was in June 2011. As per this
disclosure, the promoters and promoter group of the Company held 94.35% and the public
shareholders held 5.65%. From the above, it can be concluded that the public shareholding in
the Company is less than the mandated minimum of 25% in a listed company. The Company
is therefore in violation of the MPS requirements.
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6.
Considering the above observations, it is clear that the Company has not complied
with the MPS requirements till date in breach of rule 19A of the SCRR and Clause 40 A of
the Listing Agreement read with section 21 of the SCRA, and such non-compliance being
continuous in nature, it becomes necessary for SEBI, to confirm the directions issued vide the
interim order against the Company, its directors and promoters/promoter group. Further, for
proper regulation of the securities market and in view of the continuing nature of the
violations committed by the Company, SEBI may also initiate other action, as appropriate in
law, against the Company, its directors and promoters.
7.
Securities and Exchange Board of India Act, 1992 read with sections 11(1), 11(2)(j), 11(4) and
11B thereof and section 12A of the Securities Contracts (Regulation) Act, 1956, hereby
confirm the directions issued vide the interim order dated June 04, 2013 against the company,
Swastik Surfactants Limited, its directors, promoters and promoter group.
8.
9.
Copy of this Order shall be served on the stock exchanges and depositories for their
PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA
Date: May 02nd, 2016
Place: Mumbai
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