Order in respect of Hindustan Breweries & Bottling Limited

WTM/PS/102/CFD/DEC/2015 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under Sections 11(1), 11(2)(j), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 read with section 12A of the Securities Contracts (Regulation) Act, 1956 in the matter of non-compliance with the requirement of minimum public shareholding by listed companies In respect of Hindustan Breweries and Bottling Limited Date of Hearing: July 08, 2015 Appearances: For Noticee: Mr. N. K. Pokharna, Director For SEBI: Dr. Anitha Anoop, Deputy General Manager, Mr. Pradeep Kumar, Assistant General Manager, Mr. Rohan Vijay, Assistant Manager.

1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) had passed an interim order dated June 04, 2013 (hereinafter referred to as ‘the interim order’) with respect to 105 listed companies who did not comply with the Minimum Public Shareholding (‘MPS’) norms as stipulated under rules 19(2)(b) and 19A of the Securities Contracts (Regulation) Rules, 1957 (hereinafter referred to as ‘SCRR’) within the due date i.e., June 03, 2013. The interim order was passed without prejudice to the right of SEBI to take any other action, against the non-compliant companies, their promoters and/or directors or issuing such directions in accordance with law. The interim order was to be treated as a show cause notice by those companies for action contemplated in paragraph 18 thereof.

2. Hindustan Breweries and Bottling Limited (hereinafter referred to as ‘the Company’) is one such company against whom the interim order was passed. The equity shares of the Company are listed on the Bombay Stock Exchange Limited (‘BSE’) and Delhi Stock Exchange. The scrip of the Company is suspended for trading at BSE.

3. The Company did not file any reply to the interim order. In the interest of justice, the Company was afforded an opportunity of personal hearing on July 08, 2015. In the said hearing, Mr. N. K. Pokharna appeared on behalf of the Company and submitted that the premises of the Company was sealed by the Police and they were not allowed to take the documents. Mr. N. K. Pokharna on behalf of the Company requested time of two months for complying with the MPS norms. The representative also requested liberty to file written submissions. As no written reply was filed by the Company, the request was allowed and the representative was advised to file the written submissions within a period of one week. However, till date, the Company did not file any response/ written submissions to the interim order.

4. While proceeding further, I have considered the interim order passed in the matter against the Company, its promoters and directors. The interim order was issued against the Company as it had failed to maintain the MPS of 25% as mandated under Rule 19A of the SCRR and Clause 40A of the Listing Agreement read with section 21 of the Securities Contract (Regulation) Act, 1956 (‘SCRA’). As per the last filing of shareholding pattern of the Company for the quarter ended December 2012, as seen in the BSE website, the promoters hold 84.50% and the public holds only 15.50%. The Company is therefore in violation of the MPS requirements. I note that the Company has not filed any response in its defence.

5. I note that Hon'ble Board for Industrial and Financial Reconstruction ('BIFR') had declared the Company as sick on April 18, 2006. Later, as the net worth of the Company turned positive as on March 31, 2013, BIFR vide its order dated March 06, 2014, had discharged the Company from its purview. It is observed that the Company has not taken any steps to comply with the MPS requirements even after coming out of BIFR.

6. Considering the facts and circumstances of the case, it is clear that the Company has not complied with the MPS requirements till date in breach of Rule 19A of the SCRR and Clause 40 A of the Listing Agreement read with Section 21 of the SCRA, and such non-compliance being continuous in nature, it becomes necessary for SEBI, to confirm the directions issued vide the interim order against the Company, its directors and promoters/ promoter group. Further, for proper regulation of the securities market and in view of the continuing nature of the violations committed by the Company, SEBI may also initiate other action, as appropriate in law, against the Company, its directors and promoters.

7. Accordingly, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11(1), 11(2)(j), 11(4) and 11B thereof and Section 12A of the Securities Contracts (Regulation) Act, 1956, hereby confirm the directions issued vide the interim order dated June 04, 2013 against the Company, Hindustan Breweries and Bottling Limited, its directors, promoters and promoter group.

8. This Order shall remain in force till further directions.

9. Copy of this Order shall be served on the Stock Exchanges and Depositories for their information and necessary action.

Date: December 10, 2015 PRASHANT SARAN Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA