HEMANT KOTHARI Vs. ADJUDICATING OFFICER

JUDGEMENT

(1.) APPELLANTS are aggrieved by the adjudication order of Securities and Exchange Board of India (SEBI), dated 25th March, 2014, whereby penalty of Rs. 40 lac is imposed upon the appellants under Section 15H of Securities and Exchange Board of India Act, 1992 (for short "SEBI Act") for violating Regulation 10 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ("SAST Regulations, 1997" for short) read with Regulation 35 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SAST Regulations, 2011" for short) and by that order appellants are directed to pay the aforesaid penalty jointly and severally within the specified date.

(2.) IN the present case, investigation carried out by SEBI revealed that appellants along with Mr. Pradeep Kumar Kothari (now deceased) had acquired 6,83,717 shares of Kwality Credit & Leasing Limited (KCLL for short) during the period from 15th September, 2010 to 21st September, 2010 constituting approximately 19.53% shares of the paid -up capital of KCLL in off -market at a price of Rs. 5, but failed to make public announcement and open offer as required under Regulation 10 of SAST Regulations, 1997.

(3.) LEARNED Advocate for appellants submitted that the penalty imposed upon appellants cannot be sustained on following grounds: