Markets regulator Sebi May 7 disposed of allegations of disclosure lapses made against SBICAP Trustee Company with respect to pledging of shares of Empee Sugars and Chemicals. SBICAP Trustee is a wholly-owned subsidiary of SBI Capital Markets Ltd.
“… the view that the delayed disclosure in this case was in good faith and the same is venial and not blameworthy so as to impose monetary penalty under section 15A (b) of the Sebi Act,” the regulator said in an order.
Section 15A pertains to imposition of penalty for violations.
In July 2018, proceedings were initiated against SBICAP Trustee for allegedly making delayed disclosures to the BSE with respect to creation of pledge shares by four promoters of Empee.
Among the four promoters, one had pledged its shares in the quarter ended september 2013 and December 2013, whereas the rest three had pledged their respective shares to the trustee during the quarter ended December 2013, the Sebi said.
With regard to the NSE, the trustee said the scrips of Empee are not listed on the exchange due to which there was no requirement of making disclosures.
Under SAST (Substantial Acquisition of Shares Takeovers) norms, necessary disclosures are required to be made with the stock exchanges, where the shares of the company are listed, within two working days from the date of creation of pledge.
According to the trustee, since the scheduled banks are exempted from making disclosure of pledge in their favour under the SAST norms, as it is acting as trustee of such scheduled banks, it was not required to make such disclosure.
However, by way of caution, the disclosure was made to Empee and the BSE on July 17, 2015, it added.
The regulator noted that SBICAP is holding the pledge of shares as trustees/ agents of the scheduled commercial banks on their behalf and the benefit of exemption as available to banks could also be extended to it.
“There is no material to suggest that the alleged delayed disclosure in this case had any impact on price of the shares of the company or to indicate deliberate concealment of any material information by the Noticee, (SBICAP Trustee Company)” Sebi noted.