SEBI fines Tata Steel
Markets regulator Sebi has imposed a Rs 10-lakh penalty on Tata Steel for delay in disclosing that it had increased its shareholding in Tinplate Company of India, a group firm. Tata Steel currently holds nearly 75% in Tinplate, a company that is among the country’s largest producer of tin plates.
In September 2009, Tinplate had launched a rights offer, along with an offer for fully convertible debentures (FCDs). Sebi investigations had noticed that Tata Steel had bought about 1.3 crore shares of the company and also 55.5 lakh FCDs. Tata Steel was also allotted an additional 86.7 lakh shares and 1.2 crore FCDs. After these allotments, Tata Steel’s total holdings jumped to 42.9% from 30.8% earlier.
In April 2011, Tinplate made further stock allotments to Tata Steel, which took its aggregate shareholdings to about 59.4%.
Tata Steel was required to make the necessary disclosures within two working days of each of the allotments. However, the company had made the disclosures only on July 2, 2012, that is more than two years after its stakes went up. Relating to the alleged lapses in disclosures in the two cases, Tata Steel had submitted to Sebi that there was no actual or effective breach of the disclosure requirements as the underlying purpose of the regulations was fulfilled by virtue of the information being present in the public domain by way of compliance with other applicable statutes by the two firms.