Order in respect of Tranformers & Rectifiers (India) Limited

WTM/PS/CFD/32/AUG/2013 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM : PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under Section 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 Transformers & Rectifiers (India) Limited 1. Securities and Exchange Board of India (hereinafter referred to as 'SEBI') 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. Transformers & Rectifiers (India) Limited (hereinafter referred to as 'the Company') is one such company against whom the interim order was passed. The public shareholding in the Company on the date of the interim order was 23.18%. The shares of the Company are listed on the Bombay Stock Exchange Limited ('BSE') and the National Stock Exchange of India Limited ('NSE').

3. The Company filed its reply dated June 18, 2013 to the interim order. Thereafter, an opportunity of personal hearing was afforded to the Company on July 29, 2013, when its CFO, Mr. Rahul Shah appeared and made submissions. The Company submitted that it has undertaken a bonus issue of equity shares in the ratio of 1:9 to the public shareholders and has allotted 3,32,800 equity shares to its public shareholders on June 18, 2013 for the purposes of complying with the MPS norms. Consequently, the promoter holding was reduced from 76.82% to 74.90%. During the personal hearing, while reiterating such submissions, the representatives submitted that the Company is now compliant with the MPS norms and requested SEBI to withdraw the directions issued in paragraph 17 of the interim order.

4. I have considered the reply and submissions made by the Company. I have perused the notice dated June 24, 2013 of BSE which informed its members that the bonus shares issued by the Company are listed and permitted for trading from June 25, 2013. The public shareholders now hold 25.10% in the Company. I note that the Company has definitely delayed its compliance with the MPS requirement when it was under notice for three years for achieving such compliance. The conduct of the Company indicates to me that it was not serious in complying with the MPS norms well within the due date. Therefore, the Company is warned for its conduct and is advised to ensure compliance with all the applicable laws and regulations administered by SEBI, in letter and spirit. However, considering the fact that the Company has complied with the MPS norms, though belatedly, as observed above, I do not propose to initiate further action against the Company as contemplated in paragraph 18 of the interim order.

5. With the above observations, 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 revoke the directions vide the interim order dated June 04, 2013 against the Company, Transformers and Rectifiers (I) Limited, its directors, promoters and promoter group, with immediate effect.

6. Copy of this Order shall be served on the stock exchanges and depositories for their information and action that may deem fit and necessary in this case.

PLACE: Mumbai PRASHANT SARAN DATE: August 21, 2013 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA