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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO. EAD-2/DSR/ VVK/252/2014]
______________________________________________________________________
UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND
IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995


In respect of
Sunrise Proteins Limited
( PAN AAACS1113M )


1. Securities and Exchange Board of India (SEBI) observed certain non compliances of
Regulation 8(3) of the SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997 (SAST Regulations, 1997) committed by Sunrise Proteins Limited
(Noticee) for the years 1998 to 2010. The shares of the Noticee are listed at the Delhi
Stock Exchange (DSE).

APPOINTMENT OF ADJUDICATING OFFICER

2. The undersigned was appointed as the Adjudicating Officer vide order dated 18th
June, 2014 to inquire and adjudge under Section 15A(b) of the SEBI Act, 1992, the
alleged violation of the provisions of Regulation 8(3) of the SAST Regulations, 1997 for
the years 1998 to 2010 committed by the Noticee.



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SHOW CAUSE NOTICE, HEARING & REPLY

3. A Show Cause Notice (SCN) dated 10th July, 2014, in terms of the provisions of Rule
4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules, 1995 (Adjudication Rules) was issued to the Noticee calling upon the
Noticee to show cause as to why an inquiry should not be held against it and penalty
be not imposed under Section 15A(b) of the SEBI Act, 1992 for the alleged violations.
The noticee submitted its reply vide letter dated the 16th July, 2014.

4. Subsequently. the Noticee was given an opportunity of personal hearing on 5th
September,2014. The noticee was represented through its authorised representative
Mr. Mohan Lal Pareek, Chartered Accountant - M/s. Pareek & Associates and reiterated
the submissions made vide its reply dated16th July,2014.

ISSUES FOR CONSIDERATION

5. I have carefully perused the charges against the Noticee as per the SCN, reply and
the other material available on record. The issues that arise for consideration in the
present case are :-
A. Whether the Noticee has violated the provisions of Regulation 8(3) of SAST
Regulations, 1997
B. Whether the Noticee is liable for monetary penalty under Section 15 A(b) of the
SEBI Act, 1992
C. If so, what quantum of monetary penalty should be imposed on the Noticee
taking into consideration the factors mentioned in Section 15J of the SEBI Act,
1992?



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FINDINGS

At this juncture, I note that Regulation 8(3) of SAST Regulations, 1997 reads as under:

Reg. 8 - Continual Disclosures
" 8(3) Every company whose shares are listed on a stock exchange, shall within 30
days from the financial year ending March 31, as well as the record date of the
company for the purposes of declaration of dividend, make yearly disclosures to all the
stock exchanges on which the shares of the company are listed, the changes, if any, in
respect of the holdings of the persons referred to under sub-regulation (1) and also
holdings of promoters or person(s) having control over the company as on 31st March."

6. From the material available on record, I note that the Noticee has failed in making the
annual disclosures to DSE in violation of requirement of Regulation 8(3) of the SAST
Regulations, 1997 for the following 13 years :-


Regulation

Due Date of compliance

Filing Status

8(3) 30.04.1998 Not filed
8(3) 30.04.1999 Not filed
8(3) 30.04.2000 Not filed
8(3) 30.04.2001 Not filed
8(3) 30.04.2002 Not filed
8(3) 30.04.2003 Not filed
8 (3) 30.04.2004 Not filed
8 (3) 30.04.2005 Not filed
8 (3) 30.04.2006 Not filed
8 (3) 30.04.2007 Not filed
8 (3) 30.04.2008 Not filed
8 (3) 30.04.2009 Not filed
8 (3) 30.04.2010 Not filed


7. I note that the Noticee in its reply has submitted that they have complied with
regulation 8(3) of the SAST Regulations, 1997 but the copies of the acknowledgments
for the disclosures made before the Stock Exchange are not traceable by them,
therefore, the noticee is unable to give evidence of proof for the same. I also note that

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the noticee submitted that there is no complaint received from any investor since listing
of the shares and has refuted the allegation. Regulation 8(3) of the SAST Regulations,
1997 is clear in its import and a bare reading of it reveals that all listed companies had
to disclose their shareholdings to the stock exchange/s in which shares of such
company are listed, within 30 days from the financial year ending March 31. The
Noticee ought to have made the annual disclosures under Regulation 8(3) of the SAST
Regulations, 1997.Therefore, I do not find any merit in the submissions of the Noticee.
Since the noticee company failed to produce proof of filing necessary disclosures to the
DSE, it can be concluded that the noticee has failed to make the necessary annual
disclosures under Regulation 8(3) of the SAST Regulations, 1997 to DSE that too for a
period of 13 years.

8. The Noticee has further submitted that the non-compliance did not result in any
complaint received from any investor since listing of the shares. In this context, I would
like to rely on the following observation of Hon'ble Securities Appellate Tribunal (SAT) in
the case of Mrs. Komal Nahata vs. SEBI ( Appeal No. 5 of 2014 decided on January 27,
2014 ) "Argument that no investor has suffered on account of non disclosure and that
the AO has not considered the mitigating factors set out under Section 15J of SEBI Act,
1992 is without any merit because firstly penalty for non compliance of SAST
Regulations, 1997 is not dependent upon the investors actually suffering on account of
such non-disclosure. "

9. Further, the noticee vide its email dated the 5th September, 2014 quoted the case of
Arihant Merchants Limited wherein the consent application was closed by SEBI . I am
of the view that the said case has no relevance in the present facts of the case.

10. The provisions of Section 15A(b) of the SEBI Act, 1992, read as under :-



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Penalty for failure to furnish information, return, etc. 15A. If any person, who is
required under this Act or any rules or regulations made thereunder,

(a)..
(b) to file any return or furnish any information, books or other documents within the
time specified therefore in the regulations, fails to file return or furnish the same within
the time specified therefore in the regulations, he shall be liable to a penalty of one lakh
rupees for each day during which such failure continues or one crore rupees, whichever
is less;

11. The Honble Supreme Court of India in the matter of Chairman, SEBI v.. Shriram
Mutual Fund {[2006] 5 SCC 361} held that "In our view, the penalty is attracted as soon
as contravention of the statutory obligations as contemplated by the Act is established
and, therefore, the intention of the parties committing such violation becomes
immaterial. . Hence, we are of the view that once the contravention is
established, then the penalty has to follow and only the quantum of penalty is
discretionary."

The Hon'ble Securities Appellate Tribunal in the matter of Milan Mahindra Securities
Private Limited vs SEBI ( Order dated November 15, 2006 in Appeal No. 66 of 2003)
observed that " the purpose of these disclosures is to bring about transparency in the
transactions and assist the Regulator to effectively monitor the transactions in the
market."

12. While imposing monetary penalty, it is important to consider the factors stipulated in
Section 15J of the Act, which reads as under : -




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15J - Factors to be taken into account by the adjudicating officer : While
adjudging quantum of penalty under section 15-I, the adjudicating officer shall have due
regard to the following factors, namely:-

(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable,
made as a result of the default;

(b) the amount of loss caused to an investor or group of investors as a result of the
default;

(c) the repetitive nature of the default.

13. It is not possible, from the material available on record, to quantify any
disproportionate gain or unfair advantage accrued to the Noticee or the extent of loss
suffered by the investors as a result of the default of the Noticee. I further find that the
violation of regulation 8(3) of SAST Regulations, 1997 by the Noticee continued over a
period of thirteen years starting from the year . This indicates the repetitive nature of the
default committed by the Noticee.

ORDER

14. In view of the above, after considering all the facts and circumstances of the case
and exercising the powers conferred upon me under Section 15-I(2) of the SEBI Act,
1992 read with Rule 5 of the Adjudication Rules, I hereby impose a penalty of `
5,00,000/- (Rupees Five Lakh only ) on Sunrise Proteins Limited under Section 15A(b)
of the SEBI Act, 1992.

15. The penalty amount shall be paid by the Noticee through a Demand Draft drawn in
favour of SEBI Penalties Remittable to Government of India and payable at
Mumbai, within 45 (forty five) days of receipt of this order. The said Demand Draft-

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should be forwarded to the Division Chief, Corporation Finance Department (CFD),
Division of Corporate Restructuring - 2, Securities and Exchange Board of India, SEBI
Bhavan, Plot No. C4 -A, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai 400
051.

16. In terms of Rule 6 of the said Adjudication Rules, copies of this order are sent to the
Noticee and also to Securities and Exchange Board of India.





Date : October 14,2014 D.SURA REDDY
Place: Mumbai ADJUDICATING OFFICER








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