Adjuidcation Order Against 16 Entities in The Matter of Gee Gee Granites LTD

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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO. EAD-2/DSR/RG/PU/181-196/2014]
_____________________________________________________________________________
UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992
READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING
PENALTIES BY ADJUDICATING OFFICER) RULES, 1995.
In respect of
1. Gopichand Idandas [PAN: AAHPG0387M]
2. Sunil G Duseja [PAN: AAUPS7413F ]
3. R. Sekar [PAN: N.A]
4. S. R. Kumar [PAN: NA.]
5. S.R. Asaithambi [PAN: N.A.]
6. Heeralal Constructions [PAN: AAACH2181A]
7. Hoondi Bai [PAN: N.A]
8. Sushil G. Duseja [PAN: AAUPS7412E]
9. Anchal Sunil Duseja [PAN: AAFPD5041B]
10. Rita Gopichand [PAN: N.A.]
11. Pushpa Mahesh[PAN: N.A.]
12. Dharampal Anand [PAN: N.A.]
13. Amita Sawhney, [PAN: N.A.]
14. Deepak Sawhney [PAN: N.A.]
15. Alidoss Tejmal [PAN: N.A]
16. Asha Harish Chand [PAN: N.A.]
In the matter of
Gee Gee Granites Ltd.
_____________________________________________________________________________________
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1. Securities and Exchange Board of India (hereinafter referred to as SEBI) conducted an

examination into the draft letter of offer filed by Shri Asit Kumar Ghosh (acquirer) to
acquire 26% shares of Gee Gee Granites Limited (hereinafter referred to as GGGL'), a
company listed on the Bombay Stock Exchange (BSE) and Madras Stock Exchange
(MSE).
2. Upon examination it was, inter alia, observed that certain entities viz. (1.) Gopichand
Idandas, (2.) Sunil G. Duseja, (3.) R. Sekar, (4.) S. R. Kumar, (5.) S.R. Asaithambi, (6.)
Heeralal Constructions, (7.) Hoondi Bai, (8.) Sushil G. Duseja, (9.) Anchal Sunil Duseja,
(10.) Rita Gopichand, (11.) Pushpa Mahesh, (12.) Dharampal Anand, (13.) Amita Sawhney,
(14.) Deepak Sawhney, (15.) Alidoss Tejmal, and (16.) Asha Harish Chand (hereinafter
referred to as Noticee Nos. 1 to 16 and collectively referred to as the Noticees) being
Promoters of GGGL had disclosed their aggregate shareholdings to the Stock Exchanges
and GGGL, as required under Regulation 30(2) read with Regulation 30(3) of the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (herein after referred to
as the Takeover Regulations, 2011) with a delay i.e. on July 31, 2012 and thereby, had
violated the said provisions of law.
Appointment of Adjudicating Officer
3. SEBI has, therefore, initiated Adjudication proceedings and I have been appointed as
the Adjudicating Officer (AO) vide order dated April 02, 2014 under Section 15 I of the
SEBI Act read with Rule 3 of the SEBI (Procedure for Holding Inquiry and Imposing
Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as 'said Rules') to
inquire into and adjudge under Section 15A(b) of the SEBI Act, the alleged violation of
the provisions of law by the Noticees.

Show Cause Notice, Reply and Personal Hearing
4. Separate show cause notices dated May 20, 2014 (hereinafter referred to as 'SCN') were
issued to the Noticees under Rule 4(1) of the said Rules to show cause as to why an inquiry
should not be held and penalty should not be imposed on them under Section 15A (b) of the
SEBI Act, for the alleged violation of the abovementioned provisions of law. The Noticee
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Nos. 3, 4 & 5 vide their letter dated June 09, 2014 requested 15 days time to submit their
replies to the SCNs. Further, vide letter dated July 04, 2014, Noticee Nos. 3, 4 & 5 again
sought additional time to file their replies. However, no replies were received from the
Noticees.
5. Since, none of the Noticees submitted any replies to the SCNs, in order to conduct inquiry,
an opportunity of personal hearing was granted to them on August 04, 2014, vide notice
dated July 22, 2014. The Authorized Representative, Shri Vishal Dhedia appeared on behalf
of Noticee Nos. 1, 2, 6, 8 and 9 on the scheduled date. During the hearing, as the Authorized
Representative stated that the Noticees had not received the SCNs, copies thereof were
handed over to him. Further, he sought one week time to file the replies on behalf of the
Noticee Nos. 1, 2, 6, 8 & 9. Accordingly, the Noticees were advised to file their replies on or
before August 09, 2014. Vide email dated August 08, 2014, the Authorized Representative
submitted replies all dated August 07, 2014 on behalf of the Noticee Nos. 1, 2, 6, 8 & 9 and
informed that they are willing to file consent applications under the consent term guidelines
of SEBI in the matter before August 23, 2014. Further, the Authorized Representative stated
that he is representing Noticee Nos. 7 & 10 also and submitted the death certificate of
Notice No. 7 (dated June 19, 2012 as submitted by Noticee no.1, the husband of Noticee no.
7) issued by the Department of Public Health, Corporation of Chennai.
6. Further, vide email dated August 22, 2014 it has been intimated by the Authorized
Representative of Noticee nos. 1, 2, 6, 8, 9 & 10 that they are not in a position to file the said
consent applications by August 23, 2014 due to the ill health of Noticee No. 1 and further
requested time till August 30, 2014 to file the same. However, I find that the personal
hearing with respect to Noticee Nos. 1, 2 6, 8 & 9 got concluded on August 04, 2014 after
which the said Noticees had sufficient time to file the consent applications. The said
extension of time to file the same on the ground of Noticee No. 1's ill health seems to be
nothing but a delaying tactic adopted by the said Noticees to prolong the present
adjudication proceedings.
7. The hearing notices issued to Noticee Nos. 3, 4 & 5 were duly delivered and vide letter
dated July 30, 2014, the said Noticees requested adjournment of the scheduled hearing on
the ground that they are in the process of drafting a reply in the matter. I note that ample
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time and opportunities have been granted to Noticee Nos. 3, 4 & 5 to file their replies in the
matter. However, no replies have been received till date. Further, the hearing notices issued
to Noticee Nos. 12, 13, 14 and 15 were returned undelivered. Therefore, another opportunity
of hearing was granted to Noticees Nos. 12, 13, 14 and 15 on August 25, 2014 vide notice
dated August 12, 2014. The said hearing notices were also sent for affixture at the last
known addresses of the Noticees in terms of Rule 4(7) of the said Rules and the report
thereof is available on record. However, the said Noticees did not attend the hearing on the
scheduled date.
8. With respect to Noticee Nos. 11 & 16, I note that the hearing notices issued to them were
duly delivered, however, they did not attend the scheduled hearing nor did they make any
correspondence in this regard.
9. In view of the above, with respect to Noitcee Nos. 3, 4, 5, 11, 12, 13, 14, 15 and 16, I note that
ample opportunities and time was granted for filing of replies and presenting their case in
the matter. Therefore, I am proceeding further on the basis of material available on record
in the matter.

Consideration of Issues, Evidence and Findings
10. I have carefully perused the charges leveled against the Noticees in the SCNs,
written submissions made by them and all the documents available on record. In the
instant matter, the following issues arise for consideration and determination:

a. Whether the Noticees have violated the provisions of Regulation 30(2) read with
Regulation 30(3) of the Takeover Regulations,2011?
b. Whether the Noticees are liable for monetary penalty prescribed under Section 15
A(b) of the SEBI Act for the aforesaid violation?
c. If so, what should be the quantum of monetary penalty?

11. Before proceeding further, I would like to refer to the relevant provisions of law, which read
as under:
Takeover Regulations, 2011
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Continual disclosures.
"30(2) The promoter of every target company shall together with persons acting in concert with him,
disclose their aggregate shareholding and voting rights as of the thirty-first day of March, in such
target company in such form as may be specified.
(3) The disclosures required under sub-regulation (1) and sub-regulation (2) shall be made within
seven working days from the end of each financial year to,
(a) every stock exchange where the shares of the target company are listed; and
(b) the target company at its registered office.
12. It has been alleged in the SCN that the Noticees being promoters GGGL were under an
obligation to disclose their aggregate shareholdings to the stock exchanges i.e.
BSE and MSE and to GGGL on April 12, 2012 for the year 2012. However, the
said disclosures were made by the Noticees only on July 31, 2012, i.e. with a
delay of 110 days. It was therefore alleged that the Noticees had violated
Regulation 30 (2) read with Regulation 30 (3) of the Takeover Regulations,2011.
13. I find that the Noticee No. 7 against whom the present proceedings were initiated,
expired on June 16, 2012 and the certificate of death (as submitted by the Authorized
Representative vide email dated August 08, 2014 ) has been taken on record. In the light
of the above, I am of the opinion that the proceedings against Noticee No. 7 i.e Hoondi
Bai are liable to be abated without going into the merits of the case.
14. I find that vide separate letters dated August 07, 2014, Noticee Nos. 1, 2, 6, 8, 9 and 10
have admitted that there was a delay in making the necessary disclosures as required
under Regulations 30(2) read with 30(3) of Takeover Regulations,2011. I note that
Noticee Nos. 3, 4, 5, 11, 12, 13, 14, 15 & 16 have not made any submissions in the matter.
In view of this, I conclude that the Noticees have made delayed disclosures under the
relevant provisions of Takeover Regulations,2011 warranting imposition of monetary
penalty under Section 15A(b) of the SEBI Act which reads as under:
15A. Penalty for failure to furnish information, return, etc. - If any person, who is
required under this Act or any rules or regulations made thereunder,-
..
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(b) to file any return or furnish any information, books or other documents within the time
specified therefor in the regulations, fails to file return or furnish the same within the time
specified therefor in the regulations, he shall be liable to a penalty of one lakh rupees for each
day during which such failure continues or one crore rupees, whichever is less;

15. The disclosure made under Regulations 30 (2) read with Regulation 30 (3) of the Takeover
Regulations,2011 by promoters are made public only through Stock Exchange and the
Company. It is with this end in view that the Regulations require the making of disclosures
so that investing public is not deprived of vital information. The disclosures made by
companies listed on the stock exchanges are the means to attain such end and therefore,
dissemination of complete information is required. However, the Noticees in this case have
neglected their duty of making timely disclosures in compliance with Regulations 30 (2)
read with Regulation 30 (3) of the Takeover Regulations, 2011.

16. In Appeal No. 66 of 2003 - Milan Mahendra Securities Pvt. Ltd. Vs SEBI the Honble
SAT has observed that, the purpose of these disclosures is to bring about transparency in
the transactions and assist the Regulator to effectively monitor the transactions in the
market.

17. At this instant, it is important to quote the observations of the Honble Supreme
Court of India in the matter of SEBI v. Shri Ram Mutual Fund [2006] 68 SCL
216(SC), inter alia, held: once the violation of statutory regulations is established,
imposition of penalty becomes sine qua non of violation and the intention of parties
committing such violation becomes totally irrelevant. Once the contravention is
established then the penalty is to follow.

18. While imposing monetary penalty it is important to consider the factors stipulated in section
15J of SEBI Act, which reads as under:
15J - Factors to be taken into account by the adjudicating officer:
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While adjudging quantum of penalty under section 15-I, the adjudicating officer shall have due
regard to the following factors, namely:-
(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a
result of the default;
b) the amount of loss caused to an investor or group of investors as a result of the default;
(c) the repetitive nature of the default.
19. I observe that, from the material available on record, any quantifiable gain or unfair
advantage accrued to the Noticees or the extent of loss suffered by the investors as a
result of the defaults cannot be computed. It is observed that the violation as regards
Regulation 30(2) read with Regulation 30(3) of the Takeover Regulations, 2011 by
Noticees are not repetitive in nature.

ORDER

20. In view of the above, after considering all the facts and circumstances of the case
and exercising the powers conferred upon me under section 15-I (2) of the SEBI
Act read with Rule 5 of the said Rules, I conclude that the proceedings against
Noticee No.7 i.e Hoondi Bai stand abated. Further, I hereby impose monetary
penalty on the following Noticees:

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S. No. Name of the Noticee Regulation Penal Provisions
(as per SEBI Act,
1992)
Penalty
1 Shri Gopichand Idandas
(Noticee No. 1)
30 (2) read with 30 (3) of the Takeover
Regulations, 2011 (for the year 2012)
15 A (b)

` 15,00,000/- (Rupees Fifteen Lakh only)
to be paid jointly and severally
2 Sunil G. Duseja
(Noticee No. 2)
30 (2) read with 30 (3)of the Takeover
15 A (b)
3 R. Sekar
(Noticee No. 3)
15 A (b)
4 S. R. Kumar
(Noticee No. 4)
15 A (b)
5 S.R. Asaithambi
(Noticee No. 5)
15 A (b)
6 Heeralal Constructions
Private Limited
(Noticee No. 6)
15 A (b)
7 Sushil G. Duseja
(Noticee No. 8)
15 A (b)

8 Anchal S. Duseja
(Noticee No. 9)
15 A (b)
9 Rita Gopichand
(Noticee No. 10)

15 A (b)
10 Pushpa Mahesh
(Noticee No. 11)

15 A (b)
11 Dharampal Anand
(Noticee No. 12)

15 A (b)
12 Amita Sawhney
(Noticee No. 12)

15 A (b)
13 Deepak Sawhney
(Noticee No. 14)

15 A (b)
14 Alidoss Tejmal
(Noticee No. 15)

15 A (b)
15 Asha Harish Chand
(Noticee No. 16)

15 A (b)
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21. In my view, the penalty imposed on the Noticees is commensurate with the defaults
committed by them.

22. The above penalty amounts shall be paid by the Noticees through a duly crossed
demand draft drawn in favour of SEBI Penalties Remittable to Government of
India and payable at Mumbai within 45 days of receipt of this order. The said
demand draft shall be forwarded to the Division Chief, Corporate Finance
Department - DCR, Securities and Exchange Board of India, Plot No. C4-A, G
Block, Bandra Kurla Complex, Bandra (E), Mumbai 400 051.

23. In terms of the Rule 6 of the said Rules, copies of this order are sent to the Noticees
and also to Securities and Exchange Board of India.

Date: August 26, 2014 D. SURA REDDY
Place: Mumbai ADJUDICATING OFFICER


Adjuidcation Order Against 16 Entities in The Matter of Gee Gee Granites LTD

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BEFORE THE ADJUDICATING OFFICER

1. Securities and Exchange Board of India (hereinafter referred to as SEBI) conducted an

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