Order in the matter of non-complaince with the requirement of MPS by listed companies in respect of Magnanimous Trade & Finance Limited

WTM/PS/49/CFD/OCT/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 Magnanimous Trade & Finance 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. Magnanimous Trade & Finance 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 9.1%. 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 07, 2013 to the interim order. Thereafter, an opportunity of personal hearing was afforded to the Company on August 27, 2013, when its Director, Mr. Sudhir Kumar Parasrampuria appeared and made submissions. It was submitted by the Company that it has undertaken a bonus issue of equity shares to the public shareholders and has allotted 2,04,081 equity shares to its public shareholders on June 05, 2013 for the purposes of complying with the MPS norms. Consequently, the promoter holding was reduced from 90.90% to 71.40%. 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. The Company has submitted that it had taken the approval of the Board of Directors for the issue of the bonus shares at a meeting held on March 23, 2013. Further, the Company got the approval of shareholders by postal ballot on May 23, 2013. Thereafter, the Company has convened the Board Meeting on May 23, 2013 wherein the resolution of issue of bonus shares was re-confirmed.

5. I note that the Company has achieved the MPS requirements as stipulated under the SCRR on June 05, 2013. In this regard, I find that the Company had taken step (i.e. announcement of bonus issue on May 23, 2013) which is irrevocable in terms of Regulation 95 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, before June 03, 2013 and has allotted the bonus shares to the public shareholders on June 05, 2013. I do not find it necessary to impose any penalty or other directions on the Company, its directors and promoters. There would therefore be no need for continuing with the directions issued against the Company, its directors and promoters vide the interim order.

6. Considering the fact that the said company has complied with the minimum public shareholding norms, 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 issued vide the interim order dated June 04, 2013 against the company, Magnanimous Trade & Finance Limited, its directors, promoters and promoter group, with immediate effect.

7. 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: October 1st, 2013 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA