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of <h1>SEBI Upheld Penalties for Disclosure Violations in Share Transactions</h1> <h3>Anjaneya Holdings (P.) Ltd. Versus Securities and Exchange Board of India</h3> Anjaneya Holdings (P.) Ltd. Versus Securities and Exchange Board of India - TMI Issues:Violation of Regulations 29(2) and 29(3) of SAST Regulations, violation of Regulation 13(4A) and 13(5) of PIT Regulations.Violation of Regulations 29(2) and 29(3) of SAST Regulations:The appeal was filed against penalties imposed by SEBI for violations of Regulations 29(2) and 29(3) of the SAST Regulations. The appellants failed to disclose pledge transactions and off-market transfers in a company's shares, leading to violations. The appellants argued that Regulation 29 is not applicable to them as they were pledgers, not pledgees. However, the tribunal held that when pledged shares were invoked, resulting in a change in shareholding, disclosures were required under Regulation 29(2) and 29(3). The tribunal found that disclosures were not made by the appellants, constituting a clear violation of the regulations. While some transactions did not trigger penalties due to shareholding percentages, penalties for other transactions were upheld.Violation of Regulation 13(4A) and 13(5) of PIT Regulations:Penalties were also imposed for violations of Regulation 13(4A) and 13(5) of the PIT Regulations. The appellants contended that there was no requirement for disclosure under the PIT Regulations for pledged shares. However, the tribunal disagreed, stating that continual disclosures of shareholding or voting rights were mandated, especially when shareholding fell below specified percentages. The tribunal found that disclosures were necessary when pledged shares were invoked, as it constituted a change in shareholding. Additionally, off-market transactions and revocation of pledges triggered disclosure requirements under the PIT Regulations and SAST Regulations, which were not fulfilled by the appellants. Consequently, penalties imposed for these violations were deemed justified.Conclusion:The tribunal affirmed most penalties imposed by the Adjudicating Officer but reduced the penalty for one appellant for a specific violation. The overall appeal was partly allowed, with modifications in the penalty amounts. The judgment highlighted the importance of timely and accurate disclosures as mandated by the securities regulations, emphasizing compliance with disclosure requirements to maintain transparency and integrity in the securities market.
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