SEBI has fined the Bhushan Group of companies for violations of provisions of the SEBI takeover regulations in their acquisition of Orissa Sponge Iron and Steel Ltd.
SEBI said that Bhushan failed to make a public announcement on January 29, 2009 when they exceeded the threshold limit of 15 per cent stake in Orissa Sponge.
The public announcement for the open offer by the Bhushan Group was actually made on February 28, 2009.
Bhushan Energy Ltd (BEL) acting in concert with eight entities Bhushan Steel, Mr Brij Bhushan Singhal, Mr Neeraj Singhal, BNS Steel Trading, BBN Transportation, BNR Infotech, BNR Consultancy Services and BNS Tour & Travel (BNSTTPL) acquired more than 15 per cent shares of Orissa Sponge on January 29, triggering the open offer.
Market regulator has directed the above entities to pay Rs 4.5 lakh as penalty for violating the takeover regulations.
Bhushan argued that BNSTTPL cannot be considered among persons acting in concert (PAC) at the time when the group threshold limit of 15 per cent in Orissa Sponge was crossed.
This was because the ownership of BNSTTPL had been transferred to another group Mr Sanjeev Kumar Jain and Ms Amita Jain (Jain Group) on October 6, 2008, according to Bhushan.
SEBI investigations showed that BNSTTPL was a PAC since the sale consideration amount of Rs 1.96 crore on account of transfer of shares of BNSTTPL to the Jain group was realised by the Bhushan Group only on February 27-28, 2009.
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