Order in respect of Shayona Petrochem Limited

WTM/PS/127/CFD/JAN/2016 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 Shayona Petrochem Limited

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. Shayona Petrochem 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’). The scrip of the Company is suspended for trading at BSE.

3. The interim order forwarded to the Company vide letter dated June 05, 2013. Before proceeding further, an opportunity of personal hearing was also afforded to the Company on July 25, 2014. The same was communicated to the Company vide e-mail dated June 17, 2014. An intimation regarding the same was given to one Mr. Jitendra Parekh, the compliance officer of the Company. Mr. Jitendra Parekh vide his e-mail (hriday01@gmail.com) dated July 17, 2014, requested for a copy of the interim order and also provided the correspondence address of the Company. The said e-mail confirmed that Mr. Lalit Patel will attend the personal hearing. However, the personal hearing was deferred due to certain administrative exigencies, an intimation regarding the same was given vide e-mail dated July 18, 2014. Vide this e-mail a copy of the interim order was also forwarded to the Company. However, no reply to the interim order was received from the Company.

4. The Company was afforded another opportunity of personal hearing on July 02, 2015. The Company was also intimated about the personal hearing vide e-mail dated May 27, 2015 to hriday01@gmail.com. In reply, one Mr. A.L. Makhija vide e-mail (vjinvest@rediffmail.com) dated June 26, 2015 replied that he is not associated with the Company since past two years and suggested that Mr. Lalit Patel would be the right person to contact in this regard. Upon this, a letter dated July 30, 2015, enclosing therewith the interim order was issued to the Company. The letter advised the Company to confirm the appearance for the personal hearing. However, on the date fixed for the personal hearing, no one turned up. Considering that reasonable opportunities of personal hearing have already been afforded to the Company for making the submissions in the matter, I proceed further on the basis of the material available on record. I also note that the Company has not replied to the interim order.

5. 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 June 2012, as seen in the BSE website, the promoters hold 80.76% and the public holds only 19.24%. The Company is therefore in violation of the MPS requirements. I note that the Company has not filed any response in its defence.

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, Shayona Petrochem 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: January 07, 2016 PRASHANT SARAN Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA