Capital market watchdog Sebi on Tuesday slapped a fine of Rs 25 lakh (Rs 2.5 million) on Glaxo Group Ltd, a promoter entity of drug maker Glaxo Smithkline Pharmaceuticals, for failing to make timely disclosures about its aggregate shareholding to the company and the stock exchanges.
Glaxo Group ‘neglected the duty of making timely disclosures’ to the stock exchanges the BSE and the NSE, on various occasions, the Securities and Exchange Board of India said in its order.
Sebi came across the violations by Glaxo Group while examining the draft letter of offer filed by Glaxo Smithkline Pharmaceuticals along with UK-based Glaxo Smithkline plc and Glaxo Group, to acquire 24.33 per cent stake in the India-listed group entity.
As on quarter ending September, 2014, Glaxo Group held 35.99 per cent stake in Glaxo Smithkline Pharmaceuticals as the largest promoter shareholder.
Penalties, totalling to Rs 25 lakh which needs to be paid within 45 days, have been imposed by the capital market regulator for violating various provisions of Sebi's Takeover Regulations.
Under these norms, a promoter of a listed company has to, disclose, together with persons acting in concert with him, their aggregate shareholding and voting rights as on March 31, in the firm, within a prescribed time period, to the relevant stock exchanges as well as the company.
Sebi found that Galxo Group, as a promoter group entity, was under an obligation to disclose the aggregate shareholdings to the BSE and NSE as well as to Glaxo Smithkline Pharmaceuticals India for the year 2007.
However, the said disclosures were admittedly made by the entity with an aggregate delay of 60 days.
The market watchdog also noted that Glaxo Group was required to disclose its shareholdings for the year 2012 and 2013, but made the same with an aggregate delay of 158 days.