1. The Chairman, Securities and Exchange Board of India (‘the Board’), made and order on 29-8-2001 debarring Shri Arun Kumar Bajoria (Shri Bajoria) an certain other persons, viz., Mega Resources Ltd. (the appellant), Mega Stock Ltd., the Hooghly Mills Ltd., Pooja Bajoria, Mohini Devi Bajoria, Lata Devi Bajoria and Meenakshi Jatia, stated to be persons acting in concert with Shri Bajoria, from accessing the capital market, and dealing directly or indirectly in securities, for a period of one year. It was also directed that an Adjudicating Officer be appointed to inquire into violations, if any, of section 15A(b) of the Securities and Exchange Board of India Act, 1992 (‘the Act’) in respect of failure by Shri Bajoria and others to comply with the disclosure requirements under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (‘the 1997 Regulations’). The order further stated that as Shri Bajoria and the persons acting in concert have already reduced their holding to below 5 per cent of the paid-up capital of Bombay Dyeing & Mfg. Co. Ltd. (Bombay Dyeing) no specific directions are being issued to sell the shares acquired in violation of the 1997 Regulations. The said order is under challenge in the present appeal. Even though the impugned order is directed to Shri Bajoria and others, till now, except the present appeal no other appeal has been filed against the order.

2. The respondent, on receipt of certain information that Shri Bajoria with some other persons acting in concert, had failed to comply with the requirements of regulation 7(1) of the 1997 Regulations in the context of acquisition of more than 5 per cent of the shares of Bombay Dyeing, decided to investigate the matter. According to the respondent, the investigation revealed non-compliance of the requirements of regulation 7(1) by the concerned persons and in that context, the respondent issued show-cause notice to the alleged defaulters informing them of the findings of the investigation and also asking them to explain their conduct. The appellant responded to the notice by submitting written reply to the notice and also by availing of the opportunity of being heard offered to it by the respondent. Thereafter, Chairman, SEBI made the impugned order. Gist of his findings is available in para 10 of the order which reads as under :—

"10.1 : In view of the findings in paras 6.3 to 9.6 above I find that Shri Arun Bajoria, acquired with persons acting in concert, 26,69,732 shares as on March 15, 2000 which exceeded 5 per cent of equity of BDMCL (Bombay Dyeing). The total holding of Shri Arun Bajoria with persons acting in concert and with persons deemed to be acting in concert was 56,77,326 shares as on September 21, 2000 which was above 13 per cent of share capital of BDMCL. However, this peak holding was reduced to 54,67,213 shares on October 10, 2000 on account of sale of shares.

10.2 : As required under regulation 7(1) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 the acquirer was duty-bound to disclose the aggregate of his holdings to the target company when he acquired 20,69,732 shares with persons acting in concert which exceeded 5 per cent equity of BDMCL within 4 days i.e., by March 20, 2000. I find that Shri Bajoria and the persons acting in concert have failed to inform BDMCL about his above holdings/acquisition by 20-3-2000 as per regulation 7(1) of the Takeover Regulations, 1997. In view of the detailed discussions in the foregoing paragraphs it is clear that there was a non-compliance of regulation 7(1) by Shri Arun Bajoria. There was also a deliberate attempt to create an evidence of submission of information about the holding in the target company to CSE. On account of this Shri Bajoria alongwith the persons acting in concert have violated the Takeover Regulations, 1997 and are, therefore liable to such directions and penalties mentioned in the regulations 44 and