SEBI levies 6 crore penalty on former DHFL promoters for disclosure breach

SEBI, the Securities and Exchange Board of India, has levied a substantial fine of 6 crores on ex-promoters of DHFL (Dewan Housing Finance) for breaching disclosure regulations. This development stems from an order issued by the capital markets regulator, SEBI, which singles out several former DHFL promoters, notably including Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Wadhawan, and Sarang Wadhawan, for their breach of disclosure-related regulations. SEBI has afforded these individuals, a period of 45 days within which to remit the imposed fine.
In addition to the prominent Wadhawan figures, the penalty extends to other individuals involved, such as Aruna Wadhawan, Malti Wadhawan, Anu Wadhawan, and Pooja Wadhawan. The genesis of this penalty can be traced back to a complaint received by SEBI in January 2019. Subsequently, the regulatory body initiated an investigation into allegations that the Wadhawans had engaged in actions that misled shareholders. Specifically, they were accused of misrepresenting the extent of their promoter holding in DHFL, asserting that it stood at 39.23%.
Beyond the misrepresentation of their own holdings, it was further alleged that the promoters concealed the identities of three companies – Hemisphere Infrastructure, Galaxy Infraprojects and Developers, and Silicon First Realtors. These entities collectively held around 10% of DHFL, but the investigation revealed that they were either directly or indirectly controlled by DHFL promoters. Importantly, these entities were categorized as "public shareholders" rather than "promoter and promoter group," a critical misclassification.
This misclassification and the failure to make the requisite disclosures were found to be in direct violation of the provisions outlined in the Substantial Acquisition of Shares and Takeover (SAST) rules. SEBI's order underscores that these entities, in their capacity as the promoter or promoter group and those acting in concert with control over DHFL, were legally obligated to provide accurate disclosures concerning their shareholding and voting rights. This obligation spanned from March 31, 2008, to 2011.
In summary, SEBI's imposition of a 6-crore penalty on former DHFL promoters, including Kapil Wadhawan and others, is a result of their contravention of disclosure norms. This penalty follows a thorough investigation into allegations that the promoters not only misrepresented their holdings in DHFL but also concealed the identities of companies with significant stakes in the organization. These actions were deemed to be in violation of SAST rules, and SEBI has granted the individuals a 45-day window to fulfil the imposed financial penalty.

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SEBI levies 6 crore penalty on former DHFL promoters for disclosure breach

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