Market regulator Sebi today imposed a total penalty of Rs two lakh on Minal Industries for alleged violations of the insider trading norms regarding its proposed issue of bonus shares during the year 2010.
As per the order, Securities and Exchange Board of India (Sebi) slapped a fine of Rs one lakh on Minal Industries for delay in notifying the stock exchanges about its proposal for declaration of bonus shares.
Sebi imposed another Rs one lakh on the company for its failure to "disseminate price sensitive information on a continuous and immediate basis", as required under the norms.
The regulator said it is imposing a "consolidated penalty of Rs 2 lakh on Minal Industries Ltd" as per the provisions. Sebi said that the agenda for meeting of the company's Board to discuss the bonus issue of shares was circulated along with notice to all the directors on July 1, 2010.
However, it was only on July 6, 2010 that the company informed BSE that a meeting of Board of Directors would be held on July 9, 2010 to consider bonus issue of equity shares.
As per the norms, a company is required to give notice simultaneously to the stock exchanges in case the proposal for declaration of bonus is communicated to its Board of Directors as part of the agenda papers.
Further, the rules also mandates that all the listed companies have to disseminate price sensitive information on a continuous and immediate basis.
"Considering the facts and circumstances of the case and the evidence made available on record as discussed...it can be concluded that the noticee (Minal Industries) has not complied with the provisions of Prohibition of Insider Trading regulations." Sebi said.