Three-year disclosure must for promoter share transfer: Sebi

In its application to Sebi, the company said that Ajay Gupta intends to transfer shares constituting 17.61 per cent stake to Kailash Gupta.

The company further said it believes that the proposed transfer of shares would qualify for exemption from open offer requirements, as their shareholding pattern as promoters could be disclosed only for two years because of the company getting listed only in October 2010.

"However, both have been shareholders for a period of more than three years as on October 1, 2012," the company claimed.

"Since the company got listed in October 2010, it was impossible for the company to make such a disclosure for a period prior to October 2010 pursuant to the listing agreement or under the Takeover Regulations 2011.

"However, we submit that both the transferor and transferee have been holding shares as promoters of the company for more than three years. Kailash Gupta is the promoter/shareholder of the company since October 3, 2005 and Ajay Gupta is the promoter/shareholder of the company since December 23, 2006," it said.

After studying the company's arguments, Sebi said the relevant regulations clearly state that the promoters can transfer shares amongst themselves only if three conditions are fulfilled, the first being the persons named as promoters in the shareholding pattern filed by the target company in terms of the listing agreement for a continuous period of three years prior to the proposed acquisition.

"Since the company was listed in October 2010 only, the

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