BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO.: JJ/AO/AK/160-173/2014]
UNDER SECTION 15 I OF SECURITIES AND EXCHANGE BOARD OF INDIA
ACT, 1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING
INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES,
1995
In respect of
Name of the Noticees

Permanent Account No.

Order Number

1. Mr. Ashok Mathai Kurien

AADPK4942J

JJ/AO/AK/160/2014

2. Mr. Laxmi Narain Goel

AAEPG2531Q

JJ/AO/AK/161/2014

3. Ms. Sushila Goel

AATPD5221B

JJ/AO/AK/162/2014

4. Ambience Business Services Private

Limited
5. Briggs Trading Company Private
Limited
6. Ganjam Trading Company Private
Limited
7. Essel Infraprojects Limited

AAACA9528L

JJ/AO/AK/163/2014

AAACB4674J

JJ/AO/AK/164/2014

AAACG3975H

JJ/AO/AK/165/2014

AAACP6095M

JJ/AO/AK/166/2014

8. Veena Investment Private Limited

AAACV6436A

JJ/AO/AK/167/2014

9. Delgrada Limited (Now known as "Essel

Media Venture Limited)
10. Lazarus Investments Limited (Now
known as "Essel International Limited")
11. Jayneer Capital Private Limited

AABCD7273Q

JJ/AO/AK/168/2014

AABCL2192A

JJ/AO/AK/169/2014

AAACJ1688G

JJ/AO/AK/170/2014

12. Churu Trading Company Private

Limited (Merged with "Spirit Textiles
Private Limited")
13. Prajatma Trading Company Private
Limited (Merged with "Spirit Textiles
Private Limited")
14. Premier Finance and Trading Company
Limited Merged with "Spirit Textiles
Private Limited")

JJ/AO/AK/171/2014
(Being merged with
"Spirit Textiles Private
Limited")
AALCS5905J

JJ/AO/AK/172/2014

JJ/AO/AK/173/2014

In the Matter of M/s SITI Cables Network Limited

[Formerly Known as "M/s Wire and Wireless (India) Limited"]

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Adjudication order in the matter of M/s SITI Cable Network Limited

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FACTS OF THE CASE IN BRIEF

1. A letter of offer of the Rights Issue dated September 22, 2009 was made to the
equity shareholders of M/s SITI Cable Network Limited [Formerly known as "M/s
Wire

and

Wireless

(India)

Limited]

(hereinafter

referred

to

as

"SCNL"/"Company"), listed at Bombay Stock Exchange Limited (BSE) and

National Stock Exchange of India Limited (NSE), for issue of 23,67,67,351 equity
shares of face value of ` 1 each for cash at a price of ` 19 per equity share
including a premium of ` 18 per equity share aggregating approximately ` 44,985
Lakhs to the equity shareholders on rights basis in the ration of 109 equity shares
for every 100 equity shares held on the start of the book closure period i.e.
August 15, 2009. The issue price is 19 times of the face value of the equity
share. The issue price for the equity shares will be paid in two installments i.e. `
9 per equity shared will be payable on application and the balance ` 10 per
equity share will become payable after six months at the option of the company
but within 12 months from the date of allotment.

2. Securities and Exchange Board of India (hereinafter referred to as SEBI) upon

examining the letter of offer pertaining to the aforesaid rights issue &
shareholding pattern of the company, alleged that the promoters of SCNL,
namely Mr. Ashok Mathai Kurien (hereinafter referred to as "Ashok"/"Noticee
No. 1"), Mr. Laxmi Narain Goel (hereinafter referred to as "Laxmi"/"Noticee
No. 2"), Ms. Sushila Goel (hereinafter referred to as "Sushila"/"Noticee No.
3"), Ambience Business Services Private Limited (hereinafter referred to as
"Ambience"/"Noticee No. 4"), Briggs Trading Company Private Limited
(hereinafter referred to as "Briggs"/"Noticee No. 5"), Ganjam Trading
Company Private Limited (hereinafter referred to as "Ganjam"/"Noticee No.
6"), Essel Infraprojects Limited (hereinafter referred to as "Essel"/"Noticee
No. 7"), Veena Investment Private Limited (hereinafter referred to as
"Veena"/"Noticee No. 8"), Delgrada Limited (hereinafter referred to as

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"Delgrada"/"Noticee No. 9"), Lazarus Investments Limited (hereinafter

referred to as "Lazarus"/"Noticee No. 10"), Jayneer Capital Private Limited
(hereinafter referred to as "Jayneer"/"Noticee No. 11"), Churu Trading
Company Private Limited (hereinafter referred to as "Churu"/"Noticee No.
12"), Prajatma Trading Company Private Limited (hereinafter referred to as
"Prajatma"/"Noticee No. 13") and Premier Finance and Trading Company
Limited (hereinafter referred to as "Premier"/"Noticee No. 14") [Collectively
referred to as "Promoter Group"] had violated the provisions of regulation 3(4)
of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997
(hereinafter referred to as "SAST Regulations, 1997") read with regulation 35 of
SEBI (Substantial Acquisition of Shares & Takeover) Regulations 2011
(hereinafter referred to as SAST Regulations, 2011) and therefore
consequently, liable for monetary penalty under section 15A(b) of the SEBI Act.

APPOINTMENT OF ADJUDICATING OFFICER

3. The undersigned was appointed as Adjudicating Officer, vide order dated

February 20, 2014, under section 15-I of the SEBI Act read with rule 3 of SEBI
(Procedure for Holding Inquiry and Imposing Penalty by Adjudicating Officer)
Rules, 1995 (hereinafter referred to as the Rules) to inquire into and adjudge
under section 15A(b) of the SEBI Act the alleged violation of the provisions of
regulations 3(4) SAST Regulations, 1997 committed by the Noticee 1 to 14.

SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

4. Show Cause Notices dated August 22, 2014 (hereinafter referred to as SCNs)
were issued to the Noticee No. 1 to 14 under rule 4 of the Rules to show cause
as to why an inquiry should not be initiated against them and penalty be not
imposed under section 15A(b) of SEBI Act for the alleged violation of regulations
3(4) of SAST Regulations, 1997. The aforesaid SCNs were delivered to the
Noticee 1 to 14 via hand delivery, as per the acknowledgement card received.

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Adjudication order in the matter of M/s SITI Cable Network Limited

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5. It was alleged in the SCN that in terms of regulation 3(4) of the SAST
Regulations, 1997, Noticee No. 1 to 14 were required to submit a report along
with supporting documents to SEBI giving all details in respect of acquisition
made under regulation 3(1)(b) which (taken together with shares or voting rights,
if any, held by him or by persons acting in concert with him) would entitle such
person to exercise 15 per cent or more of the voting rights in a company within
21 days from the date of allotment of acquisition (rights issue), which Noticee No.
1 to 14 have failed to do.

6. In the interest of natural justice and in order to conduct an inquiry in terms of rule
4(3) of the Rules, the Noticee No. 1 to 14 were granted an opportunity of
personal hearing on September 26, 2014 at SEBI, Head Office, Mumbai, vide
Notices dated September 16, 2014. The said notices of hearing were delivered to
the Noticee No. 1 to 14 via hand delivery, as per the acknowledgement card
received.

7. Noticee No. 11 and Sprit Textiles Private Limited (hereinafter referred to as

"Sprit") on behalf of Noticee No. 12, Noticee No. 13 & Noticee No. 14 vide
separate but identical letters dated September 18, 2014 submitted the reply to
the abovementioned SCN, which inter alia stated as under:
"............
Wire and Wireless (India) Ltd (now known as Siti Cable Network Limited) had, in
accordance with applicable laws, issued a Letter of Offer for proposed Rights Issue of
23,67,67,351 Equity Shares of Re. 1 each at an Issue price of Rs. 19 per Equity Share
(including premium of Rs. 18 Per share) in the ratio of 109 Equity Share for every
100 Equity Shares of the Company held as on the start of Book Closure Period i.e.
August 15, 2009, with a view to fund its business requirements as detailed in Letter of
Offer dated September 22, 2009. The Issue price of Rs. 19 per share was payable in 2
installments viz. Rs. 9 per share payable on application and balance Rs. 10 will
become payable after 6 months at the option of the Company but within 12 months
from the date of Allotment.

As detailed in Para 16 in page 59 of the Letter of Offer, the Promoters had confirmed
that in the event of under-subscription they intend to apply for additional shares so
that at least 90% of the issue is subscribed, leading to possible increase in their
shareholding in the Company.

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The said Rights Issue was undersubscribed and consequently as per the undertaking
provided in the Letter of offer, 2 Promoters of the Company viz. Prajatma Trading
Company Pvt Ltd and Premier Finance & Trading Company Ltd (since merged with
Spirit Textiles Private Limited vide above submissions) had applied for unsubscribed
portion to the extent of 4,50,00,000 and 2,10,00,000 Equity Shares of Siti.

Consequently Siti had vide Board resolution passed on October 29, 2009, allotted
23,62,22,285 Equity Shares in pursuance to Rights Issue. Requisite disclosures
including those relating to pre and post shareholding, under-subscription / additional
shares subscription details, particulars of allottees etc was filed by the Company with
the Stock Exchanges and Depositories to facilitate execution of Corporate Action by
the Depositories and Listing of Rights Shares on the Stock Exchanges.

Relevant details of Pre and Post allotment shareholding of the promoters were as
detailed herein:

Promoters Name

Pre rights issue

shareholding
No. of Shares

Ashok Mathai Kurien

Ambience Business Services Pvt. Ltd
Ganjam Trading Co Pvt Ltd
Churu Trading Co Pvt Ltd
Essel Infraprojects Ltd
Laxmi N Goel
Briggs Trading Co. Pvt Ltd
Prajatma Trading Co. Pvt Ltd
Premier Finance & Trading Co Ltd
Veena Investments Pvt. Ltd
Delgrada Ltd.
Lazarus Investments Ltd.
Jayneer Capital Pvt. Ltd
Total Promoter Holding

1021000
1137500
3283250
2025500
3200000
875000
2696750
4162250
3088000
680500
16431000
5750000
61313448
105664198

%
0.47
0.52
1.51
0.93
1.47
0.40
1.24
1.92
1.42
0.31
7.56
2.65
28.23
48.64

No. of shares
allotted on
rights issue
0
0
0
35256049
0
0
0
53978602
25107665
0
0
0
66831658
181173974

Post rights issue shareholding

No. of Shares
1021000
1137500
3283250
37281549
3200000
875000
2696750
58140852
28195665
680500
16431000
5750000
128154106
286838172

%
0.23
0.25
0.72
8.22
0.71
0.19
0.59
12.82
6.22
0.15
3.62
1.27
28.26
63.26

% of voting
rights
0.30
0.34
0.98
5.86
0.95
0.26
0.80
9.29
4.66
0.20
4.90
1.71
28.25
58.52

We wish to state and submit, in connection with the violations alleged in the Show
Cause Notice, that:
a) the entire acquisition, including subscription to unsubscribed portion under the
Rights Issue of Siti was made by the Promoters in accordance with applicable law
and the undertakings provided as part of letter of offer;
b) requisite information in connection with such acquisition (including subscription
to additional shares and consequent resultant increase in promoter share holding
to 63.26%) was made available and disclosed to the Stock Exchanges for
information of Investors by Siti;
c) subscription and acquisition of additional equity shares by the Promoters did not
result in change of control of Siti; and
d) details of subscription / under-subscription / additional subscription etc were

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provided by Siti to SEBI in December 2011 when such details were sought

The promoters had, however, in-advertently and un-intentionally missed out on

compliance with the requirements of Clause 3(4) necessitating filing of Report with
SEBI.....
The Equity Shares issued in pursuance to Rights were partly paid-up at the time of
allotment and therefore the increase in voting rights of the promoters was only to the
extent of 9.88% (from 48.64% pre-allotment to 58.52% post allotment), since the
partly paid-up shares were eligible for voting only to the extent of amount paid up.
Since only 4 promoter entities out of 14 Noticees. viz. M/s. Churu Trading Company
Pvt Ltd. M/s. Prajatma Trading Company Pvt Ltd, M/s. Premier Finance & Trading
Co Ltd and M/s Jayneer Capital Pvt Ltd, had actually subscribed to the Equity Shares
(including rights renounced by other promoters) under the Rights Issue and out of
these only 2 entities had acquired additional under-subscribed portion under the
Rights Issue, the report under Rules 3(4) of SAST Regulations. 1997 would have been
required to be filed by these 4 entities only as acquirers and not by other Noticees as
promoters.
The Noticees have been regular in complying with all regulatory requirements
including filing of disclosures under various SEBI regulations and that the
unintentional technical error on account of non-filing of the Report, has neither
impacted general investor fraternity (as the information was publically made
available) nor resulted in any unwarranted gain and/or benefit to the Promoters. This
is a mere technical lapse and this has not created any prejudice to any investor/ s and
there has been no complaints from any investor on this count.
There has been many instances wherein SEBI has taken a lenient view in respect of
technical lapses and disposed off the cases with caution/ warnings.
In view of the above, considering the fact that the technical violation has neither
resulted in any loss to the investors nor benefited the promoters, we request you to
kindly condone the alleged violation. We further request you to provide us an
opportunity for personal hearing at a date convenient to you, to represent our case.
It may also be appreciated that even though the technical lapse had occurred, this
information had been in the public domain by appropriate disclosures with stock
exchanges and depositories and to that extent it may be taken into consideration that
the referred technical lapse was merely inadvertent and ought to be condoned.
We would also like to invite your kind attention to the orders passed by SAT in Cabot
International Capital Corporation v. Adjudicating Officer, Securities and Exchange
Board of India [Appeal No. 24 of 2000-2001] 29 SCL 399 (SAT -Mum.), wherein a
penalty was imposed on the company for violation of Regulation 3(4) of the Takeover
Code i.e., failure to submit the post-acquisition report to SEBI. The company
contended that they were under bona fide belief that the 1997 Regulations did not
apply to preferential allotment. They had further contended that even if it was held
that there was a failure to report under Regulation 3(4), such failure was absolutely
unintentional because similar reports had been furnished by them to the Stock
Exchange and to the Registrar of Companies and that they had nothing to gain from
not reporting the matter to SEBI, under Regulation 3(4). SAT had accepted the said
argument basing its findings on the principles established in the rulings of the

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Hon'ble Supreme Court in cases such as Hindustan Steel Ltd. v. State of Orissa AIR
1970 SC 253, Akbar Badruddin Jiwani v. Collector of Customs, : 1990 (47) ELT 161
(SC); Extrusion v. Collector of Customs 1994 (70) ELT 52 (Cal.); Superintendent and
Remembrancer of Legal Affairs to Government of West Bengal v. Abani Maity [1979]
(4) SCC 85, Gujarat Travancore Agency v. CIT: AIR 1989 SC 1671, Addl. CIT v. I.M.
Patel & Co. AIR 1992 SC 1762 and SRG Infotec Ltd. v. SEBI [1999] 22 SCL 422
(SAT -Mum.). The matter was taken up in appeal by SEBI before the High Court of
Bombay and the Hon'ble High Court (2005]123CompCas841(Bom)) had been
pleased to observe as follows in the concluding paragraphs of their judgment:
" Thus, the following extracted principles are summarized.
(A) Mens rea is an essential or sine qua non for criminal offence.
(B) Strait-jacket formula of mens rea cannot be blindly followed in each and every
case. Scheme of particular statute may be diluted in a given case.
(C) If, from the scheme, object and words used in the statute, it appears that the
proceedings for imposition of the penalty are adjudicatory in nature, in
contradistinction to criminal or quasi-criminal proceedings, the determination is
of the breach of the civil obligation by the offender. The word "penalty" by itself
will not be determinative to conclude the nature of proceedings being criminal or
quasi-criminal. The relevant considerations being the nature of the functions
being discharged by the authority and the determination of the liability of the
contravenor and the delinquency.
(D) Mens rea is not essential element for imposing penalty for breach of civil
obligations or liabilities.
(E) There can be two distinct liabilities, civil and criminal, under same act.
(F) Even the administrative authority empowered by the Act to 'adjudicate' have to
act judicially and follow the principles of natural justice, to the extent applicable.
(G) Though looking to the provisions of the statute, the delinquency of the defaulter
may itself expose him to the penalty provision yet despite, that in the statute
minimum penalty is prescribed, the authority may refuse to impose penalty for
justifiable reasons like the default occurred due to bona fide belief that he was not
liable to act in the manner prescribed by the statute or there was too technical or
venial breach etc."

We submit that on an unbiased view of the above facts and circumstances, by any
stretch of imagination, the technical lapse cannot be termed as a deliberate act on the
part of Noticee/s. The non-reporting to SEBI within the time frame, at best, be held to
be a technical lapse. In such circumstances, the esteemed regulator (SEBI) may be
pleased to condone the technical lapse, as the information sought to be covered by

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the report to SEBI was already brought out in the public domain by filing the
disclosures with stock exchanges and depositaries. The Jurisdictional High Court in
Cabot's case has pronounced that if a breach was merely technical and unintentional,
it does not merit penal consequence. In this case, the breach was bona fide and the
concerned noticees were under the impression since the disclosure was already made
to stock exchanges and depositories, they had inadvertently omitted the other
procedural aspect of filing a report the SEBI.

We have filed the report in terms of Regulation 3(4) of SAST Regulations 1997, along
with the applicable fees. Copy of the acknowledgement for having filed the report
with SEBI is enclosed.... In view of the foregoing facts and circumstances and the fact
that the disclosure was already made by Siti with stock exchanges and depositories in
due time and was available in the public domain, the report filed by the Acquirers
may be taken on record, condoning the delay.
.................."

8. A. Janakiraman, Partner of Guru & Ram Chartered Accountant, Authorized

Representative (AR) of the Noticee No.1 to 14 vide letter dated September 19,
2014 have requested for the postponement of hearing.

9. The AR on behalf of Noticee No. 1 to 10 vide letter dated September 19, 2014
have submitted the reply to the abovementioned SCN, which inter alia stated as
under:
".............

At the outset, it is submitted that the main charge in the SCN, is that the acquirers
(among the promoters) of additional shares, had failed to file the report to be
submitted to SEBI in terms of Regulation 3(4) of SAST Regulations 1997. It is an
admitted position on record that none of the above 10 noticees had acquired any
additional shares, and therefore there was no requirement cast on them to file such a
report with SEBI. Even a look at the format of the Report to be filed with SEBI in
terms of the extant regulations, would disclose that only the acquirer, is obliged to
file the report with SEBI. In view of this, it is submitted that the 10 noticees may be
discharged from the proceedings in respect of the subject SCN.

Without prejudice to the above submissions, we would like to rely on the contents of
the reply filed by the 4 acquirer of shares, with SEBI, in defense of the charges raised
in the subject SCN. It is submitted that even though the aforementioned 10 noticees
have not acquired any additional shares and were not obliged to file any report with
SEBI, the contravention pointed out in the SCN is only a technical lapse, occurred
due to inadvertence and a bonafide mistake and it is our submission that it does not

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merit any penal consequence, especially taking into account the detailed factual and
legal submissions filed by the 4 promoters who acquired additional shares. It is also
understood that the said 4 promoters have also filed the report with SEBI, even
though belatedly.
................"
10. In the interest of natural justice and in order to conduct an inquiry in terms of rule
4(3) of the Rules, the Noticee No. 1 to 14 were granted a final opportunity of
personal hearing on October 09, 2014 at SEBI, Head Office, Mumbai, vide
Notices dated September 24, 2014. The said notices of hearing were delivered to
the Noticee No. 1 to 14 as well as to the AR of the Noticee No. 1 to 14 via hand
delivery, as per the acknowledgement card received. The AR appeared on behalf
of the Noticee No. 1 to 14. During the course of hearing, AR reiterated the
submissions made by the Noticee No.1 to 10 vide letter dated September 19,
2014, by the Noticee No. 11 vide letter dated September 18, 2014 and by the
Noticee No. 12 to 14 vide letter dated September 18, 2014. Further, AR vide
letter dated October 09, 2014 on behalf of Noticee No. 1 to 14, submitted the
additional written submissions in the matter, which inter alia stated as under:
"............

It is submitted that that Show Cause Notice issued to 10 promoter entities are legally
not tenable as they were not obliged to file any report with SEBI, as these entities did
not acquire any shares to make them liable to submit a report in terms of Regulation
3(4) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations 1997
("SAST Regulations"). Even a cursory look at the format of the Report under Reg.
3(4) would disclose that only the actual acquirer is obliged to file the report with
SEBI. Hence, the 10 promoter entities are not obliged to file the report under Reg.
3(4) of the SAST Regulations. Hence, it is submitted that issue of SCN to such 10
entities is without application of mind and hence proceedings initiated by way of
issue of SCN to 10 entities, is liable to be dropped

As far as the remaining four promoter entities are concerned, viz Churu Trading
Company Private Limited, Prajatma Trading Company Pvt Ltd, Premier Finance &
Trading Co Limited and Jayneeer Capital Private Limited (hereinafter collectively
referred to as 'Acquirers'), it has been clearly explained in the reply that failure to file
the report with SEBI is a mere bonafide/inadvertent technical lapse. It is an admitted
position that (even as per the Show Cause Notice itself) it was clearly disclosed in the
letter of offer of Wire and Wireless (India) Limited (now known as Siti Cable Network
Limited) (hereinafter referred to as 'Siti') that if the issue is under-subscribed, the
promoters intend to acquire additional shares beyond their entitlement. (see para 5 of

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SCN). In view of the said acquisition, the shareholding of the Acquirers in Siti
increased from 32.50% to 55.52% and overall promoter shareholding in Siti
increased from 48.64% to 63.26% . But it is also an admitted position that exemption
is available in respect of open offer requirements (under regulation 11 (1) SAST
1997) pursuant to rights issue (even in case of increase in the shareholding by
promoter by more than 5%). (see para 4 of SCN)

It is submitted that even though the report was not filed within the stipulated time
with SEBI by the Acquirer(s) (this report was filed belatedly on 17/9/2014 along with
the necessary filing fees), the necessary disclosures were made by Siti regarding the
very same acquisition by the promoters (on which report was to be filed with SEBI as
per 3(4) SAST Regulations 1997) with Stock Exchanges before and immediately after
the allotment. Copies of relevant filings made by Siti with the Stock Exchanges are
submitted along with this submission. This establishes that the information what was
sought to be filed with SEBI, even though not filed within the requisite time by the
Acquirer(s), was in public domain, with all other concerned public forums where the
investors normally look for such information. It may be noticed that the information
has been disclosed to BSE and NSE much before the date of acquisition (this is the
date when acquirer comes to know of the allotment). The information was furnished
to BSE and NSE on 30/10/2009 whereas the acquirer would have received credit of
Shares allotted later than that date.

It is our respectful submission that the purpose of filing the report with SEBI was in
fact fulfilled by filing of disclosures with BSE and NSE. Regulations require filing of
report with SEBI within 21 days, from date of acquisition whereas the information
was filed with BSE and NSE within a day of allotment and before even the acquirer
has been officially intimated. Public Notice, detailing Basis of Allotment was also
published within 4 days of allotment, giving the gist of information regarding
allotment of shares (including particulars of additional subscription by the
promoters) in two newspapers Financial Express and Navshakthi on 4/11/2009.
(copies of Public Notice enclosed)
This is submitted to high light the factual position that the facts were already in the
public domain even before the due date of filing the report with SEBI and there
cannot be any doubt that there was any malafide intent in not filing the report with
SEBI.

It is submitted that the default can at best be considered as technical or venial breach
of the provisions. The fundamental principle of law in this matter has been explained
by supreme Court in the below cited case The Supreme Court held in its decision in
Hindustan Steel Ltd. v. State of Orissa : (1970) 25 STC 211 (SC) as follows (page 214
in 25 STC):
Penalty will not also be imposed merely because it is lawful to do so. Whether penalty
should be imposed for failure to perform a statutory obligation is a matter of
discretion of the authority to be exercised judicially and on a consideration of all the

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relevant circumstances. Even if a minimum penalty is prescribed, the authority

competent to impose the penalty will be justified in refusing to impose penalty, when
there is a technical or venial breach of the provisions of the Act.

It is a clear factual and legal position that the violation was technical, procedural
and a venial breach which did not cause any adverse consequences. Admittedly it did
not cause any disproportionate gain nor did the acquisition cause any loss to anyone
including the public shareholders of the company.

Even the Regulator (SEBI) would appreciate that, by any stretch of imagination, the
non-filing of the report with SEBI within the due time under Regulation 3(4) of SAST
Regulations 1997 can be termed as a deliberate act on the part of the concerned
Acquirers. Nor it is the case that the Acquirers had deliberately suppressed the
information with ulterior motive. Acquirers can, at best, be held to have made a
technical1apse. In such circumstances, it is our submission that the role of a
regulator is to rehabilitate and bring to an end litigation, which may not cast a
stigma on the appellant, who otherwise, admittedly, has maintained a good track
record.

The High Court in Cabot's case has pronounced that if a breach was merely technical
and unintentional, it does not merit penal consequence.. This, at best can only be an
error of judgment and, at best, an error of understanding the law. Ignorance of law is
no excuse but an erroneous interpretation is a mitigating factor especially if such
interpretation is honest and bona fide to the knowledge of the Noticee. Following the
judgment in Cabot International and for the reasons stated hereinabove, we submit
that the breach cannot be called as deliberate and the case does not merit any
imposition of any penalty.

Both SEBI and SAT have, in similar circumstances in other cases, not levied penalties
on noticing that the breach was a technical/venial breach and at best such cases were
disposed with a caution For example we place reliance on a case decided by WTM
SEBI on 2/12/2009 in the case of Shraddha Stock Broking Pvt. Ltd. In this case the
party was acting as sub broker under the broker of stock Exchange without obtaining
Registration from SEBI in violation of Section 12 of SEBI Act and the enquiry officer
recommended suspension of licence for some period and in this case, the party was
let off with a caution taking into account the bonafide error by the party and taking
that it was a technical/venial breach

We also reiterate the ratio held by Bombay High Court in the case of Cabbot
International {[2005]123CompCas841(Bom)} which has been explained in detail on
our reply filed with SEBI. Accordingly following the ratio, the case does not merit any
penal consequence.
..............."

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CONSIDERATION OF ISSUES AND FINDINGS

11. I have carefully perused the submissions of the Noticee No. 1 to 14 and the
documents available on record. The issues that arise for consideration in the
present case are :

(i) Whether the Noticee No. 1 to 14 have violated the provisions of

regulation 3(4) of SAST Regulations, 1997?
(ii) Whether the Noticee No. 1 to 14 are liable for monetary penalty under
section 15A(b) of the SEBI Act?
(iii) What quantum of monetary penalty should be imposed on the Noticee
No. 1 to 14 taking into consideration the factors mentioned in Section
15J of the SEBI Act?

FINDINGS

12. On perusal of the material available on record and giving regard to the facts and
circumstances of the case, I record my findings hereunder.

13. The relevant provisions of SAST Regulations, 1997 which reads as under:SAST Regulations, 1997
Regulation 11
(1) No acquirer who, together with persons acting in concert with him, has acquired, in
accordance with the provisions of law, 15 per cent or more but less than fifty five per
cent (55%) of the shares or voting rights in a company, shall acquire, either by
himself or through or with persons acting in concert with him, additional shares or
voting rights entitling him to exercise more than 5% of the voting rights, with post
acquisition shareholding or voting rights not exceeding fifty five per cent, in any
financial year ending on 31st March unless such acquirer makes a public
announcement to acquire shares in accordance with the regulations.

Regulation 3
(1) Nothing contained in regulations 10, 11 and 12 of these regulations shall apply to:
(a)..............
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(b) allotment pursuant to an application made by the shareholder for rights issue,
(i) to the extent of his entitlement; and
(ii) up to the percentage specified in regulation 11:
Provided that the limit mentioned in sub-clause (ii) will not apply to the
acquisition by any person, presently in control of the company and who has in
the rights letter of offer made disclosures that they intend to acquire
additional shares beyond their entitlement, if the issue is undersubscribed:
Provided further that this exemption shall not be available in case the
acquisition of securities results in the change of control of management;
(2)....................
(3).......................
(4) In respect of acquisitions under clauses (a), (b), (e) and (i) of sub-regulation (1), the
acquirer shall, within 21 days of the date of acquisition, submit a report along with
supporting documents to the Board giving all details in respect of acquisitions which
(taken together with shares or voting rights, if any, held by him or by persons acting
in concert with him) would entitle such person to exercise 15 per cent or more of the
voting rights in a company.
14. The provisions of regulation 35 of SAST Regulations, 2011 are reproduced
hereunder:
Repeal and Savings.
Regulation 35
(1) The Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997, stand repealed from the date on which these
regulations come into force.
(2) Notwithstanding such repeal,
(a) anything done or any action taken or purported to have been done or taken
including comments on any letter of offer, exemption granted by the Board, fees
collected, any adjudication, enquiry or investigation commenced or show-cause
notice issued under the repealed regulations, prior to such repeal, shall be
deemed to have been done or taken under the corresponding provisions of these
regulations;
(b) the previous operation of the repealed regulations or anything duly done or
suffered thereunder, any right, privilege, obligation or liability acquired, accrued
or incurred under the repealed regulations, any penalty, forfeiture or punishment
incurred in respect of any offence committed against the repealed regulations, or
any investigation, legal proceeding or remedy in respect of any such right,
privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid,
shall remain unaffected as if the repealed regulations has never been repealed;

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(c) any open offer for which a public announcement has been made under the
repealed regulations shall be required to be continued and completed under the
repealed regulations.
(3) After the repeal of Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997, any reference thereto in any other
regulations made, guidelines or circulars issued thereunder by the Board shall be
deemed to be a reference to the corresponding provisions of these regulations.
15. Upon perusal of letter of offer of the rights issue, it was observed that the
shareholding of the promoter group in the company as on quarter ending
September 2009 was 48.64%. It was mentioned on page 57 of the letter of offer
of the rights issue that, ".....in the event of under-subscription, our Promoters intend to
apply for additional Equity Shares, subject to obtaining necessary approval under the
applicable laws, if any, such that at least 90% of the Issue is subscribed. As a result of
this subscription and consequent allotment, the Promoters may acquire Equity Shares
over and above their rights entitlement, which may result in an increase of their
shareholding. This subscription and acquisition of additional equity shares by the
promoter, if any, will not result in change of control of the management of our company
and shall be exempt in terms of provision to Regulation 3(1)(b)(ii) of the Takeover
code........."

16. It was noted that, pursuant to the rights issue, the shareholding of the Noticee
No. 1 to 14 / promoter group in the company had increased from 48.64% to
63.26% as on quarter ending December 2009. The increase in the shareholding
of the Noticee No. 1 to 14 / promoter group was by more than 5% limit, hence,
Noticee No. 1 to 14 / promoter group were required to make an open offer as per
regulation 11(1) of SAST Regulations, 1997. However, the increase in
shareholding of the Noticee No. 1 to 14 / promoter group was pursuant to the
Rights Issue, which is exempted from open offer requirements as per regulation
3(1)(b) of SAST Regulations, 1997.

17. As per regulation 3(1)(b) of SAST Regulations, 1997, the acquisition made
pursuant to Rights Issue was exempt from open offer obligations subject to the

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condition that in case the acquirers are presently in control of the company and
they have disclosed in the rights letter of offer that they intend to acquire
additional shares beyond their entitlement, if the issue is undersubscribed. It was
observed that, the necessary disclosures have been made by the promoter group
in the rights letter of offer, thereby complying with regulation 3(1)(b) of SAST
Regulations, 1997

18. As per regulation 3(4) of SAST Regulations, 1997 in respect of any acquisition
made under clauses (a), (b), (e) and (i) of regulation 3(1), the acquirer shall,
within 21 days of the date of acquisition, submit a report along with supporting
documents to SEBI giving all details in respect of acquisitions which (taken
together with shares or voting rights, if any, held by him or by persons acting in
concert with him) would entitle such person to exercise 15 per cent or more of
the voting rights in a company.

19. It was alleged in the SCN that in terms of regulation 3(4) of the SAST
Regulations, 1997 Noticee No. 1 to 14 were required to submit a report to SEBI
within 21 days from the date of allotment of rights issue, which Noticee No. 1 to
14 have failed to do. Further, SCNL vide letters dated January 06, 2012 and
January 15, 2014 informed that the Noticee No. 1 to 14 / promoter group had not
submitted the report in accordance with the provisions of regulation 3(4) of SAST
Regulations, 1997 to SEBI.

20. Upon perusal of the replies of the Noticee No.1 to 14, and documents available
on record I find that Noticee No. 1 to 14 have not disputed the fact that their
collective shareholding, subsequent to the rights issue had increased from
48.64% to 63.26% as on quarter ending December 2009.

21. Noticee No. 1 to 14 have submitted that, pursuant to the rights issue, the shares
of the company were allotted to only Noticee No. 11 to 14 i.e. 6,68,31,658 shares
were allotted to Jayneer, 3,52,56,049 shares were allotted to Churu, 5,39,78,602

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shares were allotted to Prajatma & 2,51,07,665 shares were allotted to Premier
and Noticee No. 1 to 10 were not allotted/acquired any shares. From the
documents available on record and from the shareholding pattern of the
Promoter Group of SCNL for quarters ending September 2009 and December
2009, I find that pursuant to right issue, the shares were allotted to four Noticees
(Noticee No. 11 to 14) i.e. Jayneer, Churu, Prajatma and Premier.

22. Noticee No. 1 to 14 contented that the report under regulation 3(4) of SAST
Regulations, 1997 were required to be filed to SEBI by the acquirers only, which
in the present case are Noticee No. 11 to 14 (i.e. Jayneer, Churu, Prajatma and
Premier) and not by the Noticee No. 1 to 10. Upon perusal of the regulation 3(4)
of SAST Regulations, 1997 and the format of the report to be submitted to SEBI
in terms of regulation 3(4) of SAST Regulations, 1997, I find that the acquirer
along with persons acting in concert have to submit the report along with
supporting documents to the SEBI within 21 days from the date of acquisition.

23. It is relevant to refer to the definition of acquirer and persons acting in concert as
specified under regulation 2(1)(b) and regulation 2(1)(e) of the SAST
Regulations, 1997, respectively which read as under:

Regulation 2(1)(b)
"acquirer" means any person who, directly or indirectly, acquires or agrees to
acquire shares or voting rights in the target company, or acquires or agrees to
acquire control over the target company, either by himself or with any person acting
in concert with the acquirer.

Regulation 2(1)(e)
person acting in concert comprises,
(1) persons who, for a common objective or purpose of substantial acquisition of
shares or voting rights or gaining control over the target company, pursuant to
an agreement or understanding (formal or informal), directly or indirectly cooperate by acquiring or agreeing to acquire shares or voting rights in the
target company or control over the target company,

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(2) without prejudice to the generality of this definition, the following persons will
be deemed to be persons acting in concert with other persons in the same
category, unless the contrary is established :
(i). a company, its holding company, or subsidiary or such company or
company under the same management either individually or together with
each other;
(ii). a company with any of its directors, or any person entrusted with the
management of the funds of the company;
(iii). directors of companies referred to in sub-clause (i) of clause (2) and their
associates;
(iv). mutual fund with sponsor or trustee or asset management company;
(v). foreign institutional investors with sub-account(s);
(vi). merchant bankers with their client(s) as acquirer;
(vii). portfolio managers with their client(s) as acquirer;
(viii). venture capital funds with sponsors;
(ix). banks with financial advisers, stock brokers of the acquirer, or any company
which is a holding company, subsidiary or relative of the acquirer :
Provided that sub-clause (ix) shall not apply to a bank whose sole
relationship with the acquirer or with any company, which is a holding
company or a subsidiary of the acquirer or with a relative of the acquirer, is
by way of providing normal commercial banking services or such activities
in connection with the offer such as confirming availability of funds,
handling acceptances and other registration work;
(x). any investment company with any person who has an interest as director,
fund manager, trustee, or as a shareholder having not less than 2 per cent of
the paid-up capital of that company or with any other investment company
in which such person or his associate holds not less than 2 per cent of the
paid-up capital of the latter company.
24. Whether or not, two or more persons are acting in concert (PACs) with the
acquirer, is a question of fact, and is to be answered on the facts and
circumstances of each case. In the present case Noticee No. 11 to 14 have
admitted that, they are the acquirers. The point of discussion which arises in the
present case is whether the Noticee No. 1 to 14 together are PACs or not as per
regulation 2(1)(e)(1) of SAST Regulations, 1997.

25. Two or more persons may act in concert with each other under regulation
2(1)(e)(1) of SAST Regulations, 1997 even though they may be wholly unrelated,
whereas in the present case Noticee No. 1 to 14 are related to each other and

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are promoters. For PACs, the four elements as specified under regulation
2(1)(e)(1) of SAST Regulations, 1997 has to be established i.e. (i) the persons
must possess a common objective or purpose, (ii) that common objective or
purpose must be for the substantial acquisition of shares or voting rights or
gaining control over a listed company, (iii) the persons must directly or indirectly
co-operate with each other by acquiring or agreeing to acquire shares or voting
rights or control in the listed company and (iv) the co-operation must be pursuant
to a formal or informal agreement or understanding.

26. The essential elements of PAC as per regulation 2(1)(e)(1) of SAST Regulations,
1997 are discussed here under:

The commonality of objective is the cornerstone to decide whether two

persons have acted in concert and is essential for a finding of concert.
Therefore, for a person to be a PAC, he must possess common objective.

Second essential element of regulation 2(1)(e)(1) of SAST Regulations, 1997

is that common objective must be to acquire substantial shares or voting
rights or gaining control over the target company.

Third essential element of regulation 2(1)(e)(1) of SAST Regulations, 1997 is

that the persons must directly or indirectly co-operate with each other by
acquiring or agreeing to acquire shares or voting rights or control in the listed
company. Justice PN Bhagwati Committee report on SAST Regulations, 1997
indicated that the cooperation which is implicit in the idea of concert could be
extended in several ways, directly or indirectly, or through an agreement
formal or informal.

Fourth essential element of regulation 2(1)(e)(1) of SAST Regulations, 1997

is that the co-operation must be pursuant to a formal or informal agreement or
understanding. Further, as it is very difficult to prove concert by direct
evidence, therefore circumstantial evidence have to be taken into
consideration while proving the concert. Circumstance from which concert
can be inferred include common addresses, preferential allotment of

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securities on favorable terms, a common chairman, common shareholding,

identical responses to show cause notices signed by the same person, joint
demat account, similar trading patterns etc.

27. From the documents available on records I find that in the present case, it is
mentioned on para 16, page 57 of the letter of offer of the Rights Issue dated
September 22, 2009 that "....The promoters have confirmed that they along with the
relatives and the companies controlled by the Promoters intend to subscribe to the full
extent of their Rights Entitlements. The promoters reserves the right to subscribe to their
Rights Entitlement either by themselves, their relatives or a combination of entities
controlled by them, including by subscribing for renunciation if any made within the
Promoter Group to another person forming part of the Promoter Group. In the event of
under-subscription, our Promoters intend to apply for additional Equity Shares, subject
to obtaining necessary approval under the applicable laws, if any, such that at least 90%
of the Issue is subscribed. As a result of this subscription and consequent allotment, the
Promoters may acquire Equity Shares over and above their rights entitlement, which may
result in an increase of their shareholding. This subscription and acquisition of
additional equity shares by the promoter, if any, will not result in change of control of the
management of our company and shall be exempt in terms of provision to Regulation
3(1)(b)(ii) of the Takeover code.......". Thus, it can be seen from the letter of offer of
the Rights Issue that the Noticee No. 1 to 14 have the understanding and
common intention / meeting of mind for the substantial acquisition of shares in
the event of under subscription. Further, subsequent to the rights issue the
collective shareholding of the Noticee No. 1 to 14 had increased from 48.64% to
63.26% as on quarter ending December 2009.

28. In appeal No. 139 of 2011 - Rajesh Toshniwal v. Securities and Exchange Board
of India, Order dated June 01, 2012, Honble Securities Appellate Tribunal (SAT)
in held that, The next issue to be considered is whether the entire promoter group
has to be considered as a homogenous unit and, therefore, acting in concert in the
acquisition of shares. It is the basic principle of corporate law that promoter group is a

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Adjudication order in the matter of M/s SITI Cable Network Limited

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homogenous class. It is the normal practice to club the entire promoter group into one
class unless otherwise proved by the acquirer. The acquirers have always filed their
shareholding as belonging to the promoter group. In the disclosures made to the stock
exchanges and the Board, the promoters shareholding consisted of the group as a whole.
Even though there is a mention in the offer document that the acquirers by themselves are
responsible to the offer to the exclusion of other promoter group the conduct of the
promoters as a whole suggests that their behaviour was always united......The promoters,
as a rule, belong to a homogenous group unless otherwise proved by attendant
circumstances to be otherwise. In the present case, except the statement contained in the
public announcement no circumstance is pointed out which would prove that a set of
promoters are a class apart. It is a matter of record that the shareholding of the entire
promoter group was always disclosed as a group holding to the regulators. In the public
announcement document also the shareholding of the entire promoters group is
specifically grouped together.......The decision of the Supreme Court in Daiichi case
relied on by the appellant may not be of any assistance to him since it deals with a
different set of facts relating to common object underlying the acquisition of shares. In
the case of K.K. Modi, again relied upon by the appellant, the shareholders were
admittedly a divided house. In the present case the various statements furnished by the
promoter group and the conduct of the parties show that they acted together...... We
cannot appreciate the stand taken by the appellant in this regard...."

29. From the above I am of the view that promoter Group/ Noticee No. 1 to 14 are a
homogenous group and are persons acting in concert. Although subsequent to
the right issue no shares were allotted to Noticee No. 1 to 10 but they were
persons acting in concert. The obligation to submit the report to SEBI in terms of
regulation 3(4) of SAST Regulations, 1997 are on the acquirers along with the
PACs i.e. which in the present case are Noticee No. 1 to 14. Thus, I do not find
any merit in the submissions of the Noticee No. 1 to 14.

30. Thus I am of the view that, in order to claim an exemption from regulation 11 of
SAST Regulations, 1997 Noticee No. 1 to 14 together were required to submit a

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report to SEBI within 21 days from the date of allotment/acquisition of shares

under Rights Issue, as per regulation 3(4) of SAST Regulations, which the
Noticee No. 1 to 14 had failed to do.

31. From the documents available on record I find that vide order of the Hon'ble High
Court of Bombay dated March 08, 2012, Churu (Noticee no. 12) & Prajatma
(Noticee no. 13) had merged with M/s Sprit Textiles Private Limited and vide
order of the Hon'ble High Court of Bombay dated September 02, 2013, Premier
(Noticee no. 14) had merged with M/s Sprit Textiles Private Limited.

32. I note that, consequent to scheme of merger and amalgamation, all the rights
and obligations of the Noticee No. 12 to 14 were vested in M/s Sprit Textiles
Private Limited. As soon as the scheme of merger and amalgamation comes in
effect, the obligation/liability of the submission of the report to SEBI by the
Noticee No. 12 to 14 under regulation 3(4) of SAST Regulations, 1997 were
vested in Sprit.

33. From the replies of the Noticee No. 1 to 11 and Sprit, I find that the only Noticee
No.11 and Sprit (for the Noticee No. 12 to 14 i.e., the entities which got merged
into Sprit) have submitted the report to SEBI in terms of regulation 3(4) of SAST
Regulations, 1997 on September 17, 2014 i.e. with a delay of approximately 5
years and subsequent to the issuance of SCN. Further, Noticee No. 1 to 11 &
Sprit have admitted that the violations of regulation 3(4) SAST Regulations is
technical and procedural in nature.

34. Justice P. N. Bhagwati Committee report on Takeover, 1997 recommended that

in order to ensure transparency in the transaction and assist in the monitoring all
exempted transactions should be subject to reporting requirements to the concerned stock
exchange in advance of the proposed acquisition and to SEBI.

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35. Thus, in the light of above, I am of the view that, as the Noticee No.1 to 11 and
Sprit have failed to submit any documentary evidence in relation to the
submission of report to SEBI under regulation 3(4) of SAST Regulations, 1997,
within the stipulated time frame. Therefore, the allegation of violation of
regulation 3(4) of SAST Regulations, 1997 by the Noticee No.1 to 11 and Sprit
(for the Noticee No. 12 to 14 i.e., the entities which got merged into Sprit) stand
established.

36. The provisions of section 15A(b) of SEBI Act is reproduced hereunder :

15A. Penalty for failure to furnish information, return, etc. - If any person, who is
required under this Act or any rules or regulations made there under, a)
b) to file any return or furnish any information, books or other documents within the time
specified therefor in the regulations, fails to file return or furnish the same within the
time specified therefor in the regulations, he shall be liable to a penalty of one lakh
rupees for each day during which such failure continues or one crore rupees, whichever
is less;
c)..
37. The object of the SAST Regulations, 1997 mandating disclosure of acquisitions
beyond certain quantity is to give equal treatment and opportunity to all
shareholders and protect their interests. To translate this objective into reality,
measures have been taken by SEBI to bring about transparency in the
transactions and it is for this purpose that dissemination of such information is
required. In this regard I would like to rely upon the findings of Honble SAT in the
matter of Milan Mahendra Securities Pvt. Ltd Vs. SEBI (Appeal No. 66 of 2003
and Order dated November 15, 2006) regarding the importance of disclosure in
which SAT has observed that, the purpose of these disclosures is to bring about
transparency in the transactions and assist Regulator to effectively monitor the
transactions in the market. Further the Honble High Court of Judicature at
Bombay in The Securities and Exchange Board of India V/s. Cabot International
Capital Corporation, Appeal No. 7 of 2001 in SEBI Appeal No. 24 of 2000 has
held, The SEBI Act and the Regulations, are intended to regulate the Security Market

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and the related aspects, the imposition of penalty, in the given facts and circumstances of
the case, cannot be tested on the ground of no mens rea, no penalty. For breaches of
provisions of SEBI Act and Regulations, according to us, which are civil in nature, mens
rea is not essential. On particular facts and circumstances of the case, proper exercise of
judicial discretion is a must, but not on a foundation that mens rea is an essential to
impose penalty in each and every breach of provisions of the SEBI Act.

38. The Honble Supreme Court of India in the matter of SEBI Vs. Shri Ram Mutual
Fund [2006] 68 SCL 216(SC) held that In our considered opinion, penalty is
attracted as soon as the contravention of the statutory obligation as contemplated by the
Act and the Regulation is established and hence the intention of the parties committing
such violation becomes wholly irrelevant.........Hence once the contravention is
established then the penalty is to follow. Thus, as the violation of statutory
obligations by the Noticee No. 1 to No.11 and Sprit (for the Noticee No. 12 to 14
i.e., the entities which got merged into Sprit) has been established, I hold that
they are liable for monetary penalty.

39. While imposing monetary penalty, it is important to consider the factors stipulated
in section 15J of SEBI Act, which reads as under:

15J - Factors to be taken into account by the adjudicating officer

While adjudging quantum of penalty under section 15-I, the adjudicating officer shall
have due regard to the following factors, namely:(a)
the amount of disproportionate gain or unfair advantage,
wherever quantifiable, made as a result of the default;
(b)
the amount of loss caused to an investor or group of investors as a
result of the default;
(c)
the repetitive nature of the default.
40. In view of the charges as established, and the facts and circumstances of the
case, and the various judgments referred to and mentioned hereinabove, the
quantum of penalty would depend on the seriousness of the violation. The SAST
Regulations, 1997 have been framed in order to bring about the transparency in
the market and aim at preventing information asymmetry that may preclude any

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investor from equal treatment and opportunity with respect to the aforesaid
information. Correct and timely disclosures & submission of reports to SEBI are
an essential part of the proper functioning of the securities market.
41. It is noted that no quantifiable figures are available to assess the
disproportionate gain or unfair advantage made as a result of such default by the
Noticee No. 1 to 11 & Sprit. Further from the material available on record, it may
not be possible to ascertain the exact monetary loss to the investors on account
of default by the Noticee No. 1 to 11 & Sprit. I find from the records available
before me that the default of the Noticee No. 1 to 11 & Sprit is not repetitive in
nature.

42. In view of the above and considering the facts and circumstances of the case
and factors under Section 15J of the SEBI Act, I find that imposing a penalty of `
20,00,000/- (Rupees twenty lakhs only) on Mr. Ashok Mathai Kurien, Mr. Laxmi
Narain Goel, Ms. Sushila Goel, Ambience Business Services Private Limited,
Briggs Trading Company Private Limited, Ganjam Trading Company Private
Limited, Essel Infraprojects, Veena Investment Private Limited, Delgrada Limited,
Lazarus Investments Limited, Jayneer Capital Private Limited and M/s Sprit
Textiles Private Limited (for Churu, Prajatma and Premier i.e., the entities which
got merged into Sprit) under section 15A(b) of the SEBI Act for the violation of
regulation 3(4) of SAST Regulations, 1997 which was committed by them.

ORDER

43. In exercise of the powers conferred under Section 15-I of the SEBI Act and Rule
5 of the Rules, I hereby impose a total penalty of ` 20,00,000/- (Rupees twenty
lakhs only) on the Mr. Ashok Mathai Kurien, Mr. Laxmi Narain Goel, Ms. Sushila
Goel, Ambience Business Services Private Limited, Briggs Trading Company
Private Limited, Ganjam Trading Company Private Limited, Essel Infraprojects,
Veena Investment Private Limited, Delgrada Limited, Lazarus Investments

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Adjudication order in the matter of M/s SITI Cable Network Limited

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Limited, Jayneer Capital Private Limited and M/s Sprit Textiles Private Limited
(for Churu, Prajatma and Premier i.e., the entities which got merged into Sprit) in
terms of the provisions of section 15A(b) of SEBI Act for the violations of
provisions of regulation 3(4) of SAST Regulations, 1997. In the facts and
circumstances of the case, I am of the view that the said penalty is
commensurate with the violations committed by Noticee No. 1 to 11 & Sprit (for
the Noticee No. 12 to 14, i.e., the entities which got merged into Sprit). Noticee
No. 1 to 11 & Sprit shall be jointly and severally liable to pay the said monetary
penalty.

44. They shall pay the said amount of penalty by way of demand draft in favour of
SEBI - Penalties Remittable to Government of India, payable at Mumbai, within
45 days of receipt of this order. The said demand draft shall be forwarded to
Deputy General Manager, Corporation Finance Department, Division of
Corporate Restructuring, Securities and Exchange Board of India, SEBI Bhavan,
Plot No. C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai400
051.

45. In terms of rule 6 of the Rules, copies of this order are sent to the Noticee No. 1
to 11 & Sprit (for the Noticee No. 12 to 14, i.e., the entities which got merged into
Sprit) and also to the Securities and Exchange Board of India.

Date: December 29, 2014

Place: Mumbai

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Jayanta Jash
Adjudicating Officer

Adjudication order in the matter of M/s SITI Cable Network Limited

December 29, 2014