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March 5, 2024

Sebi Case Settled as Three Entities Pay Rs 10 Lakh for Disclosure Violation

Three entities, namely GMO Emerging Markets Fund, GMO Emerging Markets Equity Fund, and MDPIM Emerging Markets Equity Fund, have reached a settlement with the Securities and Exchange Board of India (Sebi) after paying Rs 10 lakh to resolve a case concerning disclosure violations.

The settlement follows a suo motu application filed by the entities, proposing to settle potential proceedings arising from their failure to comply with regulatory norms under the Substantial Acquisition of Shares and Takeovers (SAST) rules. Sebi’s settlement order states that any potential proceedings against the applicants for violations are now resolved.

The regulatory action stems from the entities’ sale of 2.33 percent of shares in Gayatri Projects Ltd between March 9, 2022, and December 5, 2022. This transaction resulted in their aggregate shareholding dropping from 7.13 percent to 4.80 percent, triggering disclosure obligations under the SAST Regulations.

Under these regulations, the entities were required to disclose the transaction within two working days by December 7, 2022. However, the disclosure was not made until August 1, 2023, marking a delay of 238 days.

The settlement with Sebi involves payment of a Rs 10 lakh settlement charge, resolving the regulatory breach and averting potential further action. By voluntarily settling the case, the entities have effectively preempted any formal enforcement action that may have been pursued by Sebi for the delayed compliance with disclosure obligations.

The settlement underscores the importance of timely and accurate disclosure in maintaining transparency and regulatory compliance within the securities market. It serves as a reminder to market participants of their obligations under regulatory frameworks and the consequences of non-compliance.

Sebi’s intervention in cases of disclosure violations highlights its commitment to upholding the integrity and fairness of the securities market. By enforcing compliance with disclosure norms, Sebi seeks to ensure a level playing field for all market participants and uphold investor confidence.

Moving forward, it is imperative for entities operating in the securities market to adhere diligently to disclosure requirements and other regulatory obligations. Timely and transparent disclosure not only fosters investor trust but also contributes to the efficient functioning of the market ecosystem.

Rajan Shukla

Rajan Shukla

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