GMM Pfaudler, Pfaudler Inc agree on settlement with Sebi, to pay Rs 7 lakh

GMM Pfaudler and Pfaudler Inc have settled with Sebi a probe for alleged failure to maintain the minimum public shareholding norms by paying over Rs 7 lakh as settlement charges. Due to open offer in 2013, the total promoter shareholding, including Pfaudler Inc's, changed to 76.66 per cent in GMM Pfaudler, which indicated that public holding was not at least 25 per cent as mandated under the minimum public shareholding norms (MPS), the regulator said in an order.

To bring down the shareholding to 75 per cent, offer for sale for 1.66 per cent (2,42,472 shares) was made by GMM which was completed in December 2014. It was alleged that GMM Pfaudler failed to maintain the MPS of 25 per cent and there was delay in bringing down the mandated shareholding of non-public to 75 per cent within the stipulated time by Pfaudler Inc.

Hence, it was in violation of listing norms and the SAST (Substantial Acquisition of shares and Takeovers) regulations, the regulator said. Following this, the regulator initiated adjudication proceedings against the two.

While the proceedings were pending, both filed an application in November 2018 under consent mechanism to settle the case without admission or denial of the guilt. Both entities in their meeting with the regulator's internal committee in January 2019 proposed to pay Rs 6.97 lakh towards settlement charges.

The amount was approved by the panel of whole-time members of Sebi, the regulator said in an order. Accordingly, the Securities and Exchange Board of India (Sebi) said, "This settlement order disposes of... adjudication proceedings initiated against the Noticees 1 and 2 viz. GMM Pfaudler Limited and Pfaudler Inc, respectively," Sebi said.

Enforcement actions, including restoring or initiating the proceedings, could be initiated if any representation made by them is found to be untrue, Sebi said.

(With inputs from agencies.)