Sebi fines 2 promoters of Aadi Industries Rs 30 lakh for disclosure lapses

Markets regulator Sebi has imposed a total fine of Rs 30 lakh on two promoters of Aadi Industries for failing to disclose the change in their shareholding in the firm. Rushabh Jitendra Shah and Minesh Devendra Shah were promoter directors of the firm at the time of the violation, as per Securities and Exchange Board of India (Sebi) order.

The regulator conducted an investigation from January 2013 to December 2014 regarding the transactions carried out by them. During the probe, Sebi observed that Minesh executed off-market transactions and acquired more than 5 per cent of the share capital of the company during each of the quarter periods with effect from January 2012.

Besides, Rushabh Shah had executed various on-market and off-market transactions and on asking the BSE about the disclosures made by any of them, the exchange in a reply to the regulator said that no disclosures were received from any entities during the examination period. Under takeover norms and insider trading regulations, any acquirer who acquires more than 5 per cent shares in the target company, he is required to make disclosures to the exchange and the company within two working days.

However, till the date of passing of this order, both have not made mandatory disclosures under PIT (Prohibition of Insider Trading) regulations and takeover norms for the relevant period, Sebi said in an order dated April 30. Besides, Rushabh being promoter director entered into an opposite transaction (buy or sell) during the next six months prior to the last transaction and thereby violated the code of conduct under PIT norms, the regulator added.

Under PIT code of conduct, all directors, designated employees, officers who buy or sell shares of the firm shall not enter an opposite transaction for the next six months from the date of the last transaction. Accordingly, a fine of Rs 25 lakh was imposed on Rushabh Shah which includes a separate penalty for violating the code of conduct. Minesh has levied a penalty of Rs 5 lakh.

In a separate order, Sebi imposed Rs 15 lakh fine on Step-up Marketing and two of its directors -- Harjit Singh Dhariwal and Raghbir Kaur-- for illegally mobilising funds through unregistered collective investment schemes. Sebi said the firm and the directors are "jointly and severally" liable to pay the penalty.

The company was operating schemes for sale, breeding, rearing and keeping of livestock with a promise of returns to investors, Sebi noted.