Sebi Settles Case With Jindal Saw, Others For Violating Norms

New Delhi: In a significant development, five entities, including Jindal Saw and its promoter Prithavi Raj Jindal, have settled a case pertaining to alleged violation of regulatory norms with the Securities and Exchange Board of India (Sebi) on Friday.

Entities Involved and Settlement Amount

The entities involved in the settlement are Jindal Saw, Prithavi Raj Jindal, Hexa Tradex Ltd, JITF Infralogistics Ltd, and Sigmatech Inc. Collectively, they have paid a total of Rs 1.21 crore towards the settlement charges.

Settlement Proposal and Findings

The settlement order was issued after the applicants proposed to settle the ongoing proceedings against them without admitting or denying the findings of fact and conclusions of law. Consequently, the instant adjudication proceedings initiated against the applicants vide SCN dated February 01, 2022, have been disposed of.

Background of the Case

The case originated from Sebi's examination of Jindal Saw Ltd, Hexa Tradex Ltd, and JITF Infralogisitics Ltd to determine compliance with disclosure norms, Substantial Acquisition of Shares and Takeovers (SAST), and insider trading rules. The examination revealed that Jindal Saw and JITF Infralogistics had filed incorrect shareholding patterns, thereby violating the SCRA, disclosure rules, and listing agreement.

Additionally, Hexa Tradex Ltd was found to have filed an incorrect shareholding pattern by including Sigmatech Inc as a public shareholder, in contravention of regulatory norms. Furthermore, Jindal Saw and Hexa Tradex failed to disclose Sigmatech Inc as part of the promoter group, violating disclosure rules.

In its settlement order, Sebi noted that Sigmatech Inc had delayed filing the report and failed to make requisite disclosures, thereby flouting SAST regulations and insider trading norms. Consequently, Jindal Saw's promoter and Chairman, Prithavi Raj Jindal, was found to have failed in fulfilling his responsibilities under the disclosure rules.

Show Cause Notice and Settlement

Following these findings, the markets watchdog issued a show-cause notice (SCN) to the applicants on February 01, 2022, for the alleged violation of norms. Subsequently, the applicants filed settlement applications with Sebi, which recommended settling the matter on payment of Rs 1.21 crore. The applicants subsequently paid the amount, leading to the settlement of the case.

The settlement between Sebi and the five entities involved highlights the importance of adhering to regulatory norms and making timely and accurate disclosures. By settling the case, the entities have acknowledged their responsibility and taken steps to rectify the violations. This development serves as a reminder to all listed companies and their promoters to comply with Sebi's regulations to maintain the integrity and transparency of the Indian securities market.