The Securities and Exchange Board of India (Sebi) on Wednesday imposed a fine of Rs 1.03 crore on Apollo Tyres for allegedly failing to comply with buyback regulations.
In its order, the market watchdog imposed "a consolidated penalty of Rs 1.03 crore on Apollo Tyres Ltd...for the failure to comply with Sebi (Buy Back of Securities) Regulations".
It was alleged that shares of Apollo Tyres were bought back by the company and its promoters in contravention of the relevant section of the Companies Act and Sebi (Buy Back of Securities) Regulations.
The violations are alleged to have been committed by the company in the year 2003.
Also, it was alleged that the directions given by the Supreme Court in its order in August 23, 2001 were ignored by the company.
The Supreme Court had directed that Apollo Tyres should have an opportunity to buy back the shares by complying with the provisions of relevant section of Companies Act, which states that the buyback of the shares or other specified securities listed on any recognised bourse has to be in accordance with the regulations made by Sebi in this behalf.
"...directions given by the Supreme Court vide its order dated 23.08.2001 was ignored by the noticee (Apollo Tyres) while implementing the buyback of shares," Sebi said.
Besides, Apollo Tyres failed to submit its board resolution dated in April, 24 2003 authorising the buyback with the requisite timeframe.
The company also failed to issue a public notice within time limit about the extinguished shares. In the public notice, Apollo Tyres had failed to disclose the pre and post shareholding pattern.