The Securities and Exchange Board of India has imposed a penalty of Rupees 25 Crores on Mukesh Ambani, Anil Ambani, Nita Ambani, Tina Ambani and few other individuals.
The penalty has to be deposited within a period of 45 days which to be paid jointly and severally, the market regulator ordered.
Reason
Back in January 2020, promoter stake in Reliance Industries increased by 6.83 per cent after conversion of 3 crore warrants issued in 1994.
In 1994, the allotment was made consequent to the exercise of the option on warrants attached with 6,00,00,000-14% Non Convertible Secured Redeemable Debentures of Rs.50/-each aggregating to Rs.300,00,00,000 was issued.
However, it was alleged that the promoter group failed to make an open offer in accordance with Securities and Exchange Board of India Regulations, 1997.
As per extant regulations, a promoter group acquiring more than 5 per cent stake needs to make an open offer to minority investors within the ongoing financial year.
In its order SEBI mentioned that the promoter group and other noticees in the case violated regulation 11(1) of takeover regulations.
Why Mukesh and Anil held liable?
Referring to Section 8 of the Hindu Minority and Guardians Act, the SEBI held that Mukesh and Anil were the natural guardians of their children.
Hence, they were liable on account of the violation in respect of the shares held by their children, who were minors on the date of violation.
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