• Sat. May 27th, 2023

Sebi fines Future Corporate Resources, Kishore Biyani and 13 others for open offer non-compliance

Byadmin

May 3, 2023

Sebi found that Future Corporate Resources Pvt Ltd (FCRL) along with 14 entities did not make a public announcement of an open offer following FCRL's increased stake in Praxis.

Sebi found that Future Corporate Resources Pvt Ltd (FCRL) along with 14 entities did not make a public announcement of an open offer following FCRL’s increased stake in Praxis.

They were asked to pay the fine within 45 days, the Securities and Exchange Board of India says in its order

Sebi imposed a fine totaling Rs 20 lakh on Future Corporate Resources, Kishore Biyani and 13 others for failing to make a public announcement of an open offer to Praxis Home Retail shareholders. They were asked to pay the fine within 45 days, the Securities and Exchange Board of India (Sebi) said in its order.

Sebi found that Future Corporate Resources Pvt Ltd (FCRL) along with 14 entities did not make a public announcement of an open offer following FCRL’s increased stake in Praxis.

Praxis shares totaling 30 lakh were allotted to one of its sponsor entities FCRL, following the exercise of the option to convert 3,180 mandatory convertible debentures (CCDs) by FCRL, out of the 7,500 CCDs initially allotted .

After exercise of the conversion option, FCRL’s stake in Praxis decreased from 47.43% in the quarter ended December 2019 to 53.13%, representing a 5.71% increase in stake as of February 11 2020.

“Given that FCRL’s increased stake in Praxis post-grant is 5.71%, or more than 5%, FCRL and Other Notices (PAC) would have been required to make a public announcement of the offer opened under…SAST (Substantial Acquisition of Shares and Repurchases),” Sebi said in its order passed on Friday.

However, Sebi noted that “notifiers (15 entities) have not made a public announcement of the open offer, to date, in this case” and violated the provisions of the SAST standards.

The SAST regulation was triggered in connection with the share allocation and subsequent increase in FCRL’s shareholding. The rule states that the acquirer and the persons acting in concert with him will be jointly and severally liable for the performance of the obligation.

One of the purposes of bonds under an open offering is to provide an exit option to shareholders other than the target company’s promoters, Sebi said.

As a result, Sebi fined Rs 10 lakh on FCRL and Rs 10 lakh together on 14 entities – Kishore Biyani, Akar Estate and Finance, Surplus Finvest, Retail Trust, Anil Biyani, Ashni Kishore Biyani, Avni Biyani, Gopikishan Biyani , Laxminarayan Biyani, Rakesh Biyani, Sangita Biyani, Sunil Biyani, Vijay Biyani and Vivek Biyani.

These 15 entities constitute the promoter and the entities of the Praxis promoter group before and after the allocation of the shares within the framework of the exercise of conversion of the CCDs.

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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)

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