National Insurance Company settles disclosure lapse case with Sebi, pays Rs 75 lakh

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February 8, 2021 6:02 PM

Sebi agreed to settled the case after the insurance company approached the regulator with a plea to settle the matter "without admitting or denying the findings of fact and conclusions of law".

It was alleged that National Insurance Company had made delay in making disclosures in respect of change in its shareholding in Axis Bank.It was alleged that National Insurance Company had made delay in making disclosures in respect of change in its shareholding in Axis Bank.

State-owned National Insurance Company has settled with markets regulator Sebi a case pertaining to alleged shareholding disclosure lapses after paying settlement charges of nearly Rs 75 lakh.

Sebi agreed to settled the case after the insurance company approached the regulator with a plea to settle the matter “without admitting or denying the findings of fact and conclusions of law”.

“The proposed proceedings to be initiated for the default…are settled qua the applicant… Sebi shall not initiate any enforcement action against the applicant for the said defaults,” the regulator said in a settlement order passed on Friday.

It was alleged that National Insurance Company had made delay in making disclosures in respect of change in its shareholding in Axis Bank.

The Securities and Exchange Board of India (Sebi) in its order mentioned that it conducted an investigation in the matter of Axis Bank.

During the investigation, the regulator noted that National Insurance Company had made delay in making disclosures as required under PIT (Prohibition of Insider Trading) norms in respect of change in its shareholding in the bank.

It was noted in the investigation that during the period between October 2017 and September 2018, the value of securities of Axis Bank traded by the applicant (National Insurance Company), a promoter of the bank, on each trading day was more than Rs 10 lakh, the Sebi order said.

The same was required to be disclosed to within two trading days under the PIT Regulations. However, the disclosures for all the transactions were made by the applicant only on September 28, 2020, with a delay, it added.
In view thereof, the regulator had decided to issue a ‘notice of summary settlement’ in December 2020 to the applicant, intimating thereby that if the applicant so desired, the proceedings (to be initiated) may be settled and disposed of upon filing of a settlement application along with settlement charges of Rs 74.93 lakh.

Accordingly, the insurance company filed an application and settled the matter on a payment of Rs 74.93 lakh.
In a separate settlement order, Pranabh Dinesh Mody and Purvi Uday Asher settled with Sebi a case related to alleged delayed in making disclosures in respect of change in their shareholding in J.B. Chemicals and Pharmaceuticals on a payment of Rs 9.79 lakh towards settlement fee.

It was noted that Pranabh Dinesh Mody and Purvi Uday Asher inherited 3.61 per cent and 2.01 per cent stakes, respectively, of the company on October 31, 2019, from their late father. Due to this, their shareholding increased from 5.86 per cent to 9.47 per cent and 0.44 per cent to 2.45 per cent, respectively.

The same was required to be disclosed to the stock exchange within two working days under the SAST (Substantial Acquisition of Shareholding and Takeover) Regulations. However, the disclosure was allegedly made by the applicants on July 7, 2020, with a delay of 245 days, the regulator said in its order.

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