Market regulator Sebi has directed four promoter entities of Khaitan Electricals to pay "consideration amount" with interest to its shareholders for failing to disclose acquisition of shares in the company.
Sebi has also directed the four entities, including two individuals, to make a public announcement regarding purchase of company's shares within 45 days.
The order, issued on December 31, was against – Sunil Krishan Khaitan, Krishan Khaitan, Khaitan Lefin Ltd (KLL) and the Orientale Mercantile Company Ltd (OMCL).
"The noticees, Sunil Krishan Khaitan, Krishan Khaitan, Khaitan Lefin and The Orientale Mercantile Company shall make a combined public announcement to acquire shares of the target company, Khaitan Electricals Ltd... within a period of 45 days from the date of this order" Sebi said.
It was found that the entities had not made public announcement regarding purchase of shares in the company even as their shareholding increased beyond the threshold limit of 15 per cent, in 2007.
Further, the regulator said the entities "shall, alongwith consideration amount, pay interest at the rate of 10 per cent per annum, from June 16, 2007 to the date of payment of consideration..."
Shareholders who were holding shares in the target company on the date of violation and whose shares have been accepted in the open offer, after adjustment of dividend, if any, paid, would be eligible for the consideration amount.
As per norms, the obligation to make public announcement gets triggered when the acquisition of the acquirer, individually or collectively alongwith persons acting in concert with him crosses the threshold limit of 15 per cent.
Sebi observed the entities had acquired 13 lakh shares (upon conversion of warrants) in the company in two tranches. Out of these Sunil Khaitan and Krishna Khaitan acquired 50,000 shares each, KLL had bought 9 lakh shares, while OMCL acquired 3 lakh shares, on March 12, 2007.
The regulator said that the stake of the promoter group, collectively increased from 25.83 per cent to 34.21 per cent and the acquirers collectively failed to make a public announcement within four working days from date of purchase.