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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO. CFD-DCR/ CFL-USPL/AO/DRK-DS/EAD3- 590/134-2014]
______________________________________________________________________
UNDER SECTION 15 I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5(1) OF SECURITIES AND EXCHANGE BOARD OF INDIA
(PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY
ADJUDICATING OFFICER) RULES, 1995
Against
Upvan Securities Pvt. Ltd.
[Currently Known as Altius Finserve Pvt. Ltd.]
12 Floor, 1205/1206, Hallmark Business Plaza,
Sant Dhyneshwar Marg, Bandra (East),
Mumbai 400 051
[PAN No.: AAACU3955D]

(In the matter of Capman Financials Ltd.)
______________________________________________________________________

FACTS OF THE CASE IN BRIEF

1. Securities and Exchange Board of India (hereinafter referred to as 'SEBI'), while
examining the offer document of Capman Financials Ltd. (hereinafter referred to
as 'the company / CFL'), observed certain non- disclosures by the promoters of
the company. During the relevant time, the shares of the company are listed at
BSE Ltd., Jaipur Stock Exchange Ltd. (JSE) and Madhya Pradesh Stock
Exchange Ltd. (MPSE).

APPOINTMENT OF ADJUDICATING OFFICER

2. I was appointed as Adjudicating Officer under section 15 I of the Securities and
Exchange Board of India Act, 1992 read with Rule 3 of the Securities and
Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties
by Adjudicating Officer) Rules, 1995 (hereinafter referred to as Rules), to inquire
into and adjudge under Section 15A(b) of the SEBI Act, the violation of
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Regulations 7(1A) read with 7(2) of SEBI (Substantial Acquisition of Shares and
Takeover) Regulations, 1997 (hereinafter referred to as "SAST Regulations,
1997") alleged to have been committed by Upvan Securities Pvt. Ltd. (Currently
known as Altius Finserve Pvt. Ltd.) (hereinafter referred to as 'the noticee/ it/
Upvan'). The order appointing the undersigned as Adjudicating Officer was
communicated vide communiqu dated March 18, 2013.

SHOW CAUSE NOTICE, REPLY AND HEARING

3. A Show Cause Notice no. A&E/EAD-3/DRK/CS/19078/2014 dated July 03, 2014
(hereinafter referred to as 'SCN') was served on the noticee in terms of the
provisions of Rule 4 of the Rules, requiring the noticee to show cause as to why
an inquiry should not be held against the noticee and why penalty, if any, should
not be imposed on the noticee under Section 15A(b) of the SEBI Act for the
alleged violation of Regulations 7(1A) read with 7(2) of the SAST Regulations.
The said SCN was sent through Registered Post Acknowledgement Due (RPAD)
and was served on the noticee.

4. It was alleged in the SCN that on September 15, 2008 the noticee had bought
1,00,000 shares of CFL due to which its shareholding increased from 1.63% to
4.47%. The detail of the transaction is provided below:

Date of
transaction
Name of
entity
No. of shares
acquired
Pre-acquisition Post- acquisition

15.09.2008
Upvan 99,300 57,500 (1.63%) 1,57,500 (4.47%)

5. Because of this acquisition, the noticee was required to make disclosure under
Regulation 7(1A) read with Regulation 7(2) of the SAST Regulations. It is alleged
that the noticee had failed to make these disclosures under Regulation 7(1A)
read with Regulation 7(2) of SAST Regulations.

6. The noticee vide its letter dated July 21, 2014 sought 30 days time to file its reply
to the SCN. Vide letter dated July 22, 2014, the noticee was granted 2 weeks
time to file its reply. The noticee, vide letter dated August 04, 2014, again sought
another 30 days time to file reply to the SCN.
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7. Vide hearing notice dated August 08, 2014, the noticee was granted final
opportunity to file its reply before August 22, 2014 and the noticee was also
granted a personal hearing on August 26, 2014.

8. The noticee vide its reply dated August 23, 2014, made the following
submissions:
a. Upvan acquired 1,00,000 shares of Capman from Ms. Asha Ratan Khaira
who was also part of the promoter group of Capman. Hence this transfer
was inter se promoter transfer and the overall shareholding of promoter
group did not change.
b. Upvan was a part of the promoter group of Capman and it is SEBI's own
case that the promoter group was holding around 32.65% of the total
share capital i.e. much more than the threshold limit of more than 15%, as
specified by the then Takeover Regulations. This established that with this
acquisition of around 2.84% by Upvan there was no change in control of
Capman and promoter holding was constant at 32.65%.
c. The said change was evident in the shareholding pattern of Capman in
September 2008 which as per the Listing Agreement is disclosed to the
stock exchanges somewhere in October 2008. In view of the same, we
submit that there was no malafide intention on part of the company to not
to disclose or to hide the said acquisition or to conceal the information and
the same was disclosed to Capman which incorporated the same in
shareholding pattern for the quarter ending September 2008 which was
duly displayed at BSE website.
d. The noticee company was acquired by current management around
September 2009 and subsequent to that Upvan was removed from the
promoter group of Capman.
e. In view of the above, we submit that the company should not be penalized
for the acts of omission or commission carried out by the previous
management.
f. We submit that the details regarding acquisition were duly disclosed, albeit
under different regulations and not under Takeover Regulations which
established that the company did not have any malafide intention not to
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disclose the said information or to hide the information from the
shareholder and public at large.

9. Further, vide letter dated August 25, 2014, the noticee authorised Shri Balveer
Singh Choudhary, Chartered Accountant as its Authorised Representative (AR) to
appear for the personal hearing on August 26, 2014.

10. The AR of the noticee appeared for the hearing on August 26, 2014 and
reiterated the submissions made vide reply dated August 23, 2014 and stated
that he has no further submissions to make..

CONSIDERATION OF EVIDENCE AND FINDINGS

11. I have taken into consideration the facts and circumstances of the case, and the
material made available on record.

12. It was alleged in the SCN that the noticee had failed to make disclosures with
respect to change in its shareholding as required under Regulation 7(1A) read
with 7(2) of the SAST Regulations.

13. As per the requirements of Regulation 7(1A) read with 7(2) of the SAST
Regulations, the noticee was required to make the disclosure with respect to the
change in its shareholding as stated in pre-para 4, to the company and to the
stock exchanges where shares of the company are listed within 2 days of the
acquisition of shares.

14. The noticee has submitted that the acquisition was inter se promoter transfer and
the overall shareholding of the promoter group did not change. Further as per the
submission of the noticee the said change in shareholding was available in the
public domain on BSE website. The noticee has further submitted that the details
regarding the said acquisition were duly disclosed, however, under different
regulations.

15. It is pertinent to note here that during the relevant time, the shares of the
company are listed at BSE Ltd., JSE and MPSE and in support of its submission,
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the noticee has submitted the change in shareholding available on BSE website
only. However as per the requirement of Regulation 7(1A) the change in the
shareholding was required to be disclosed to all the stock exchanges where the
shares of the target company are listed. Further, the noticee has failed to
produce any supporting document to show that the disclosure with respect to the
change in shareholding was made under different regulations as contended.

16. At this juncture, I would like to quote the order of Hon'ble Securities Appellate
Tribunal in G. Suresh vs. SEBI dated 29.04.2014, wherein it was held that "True
and timely disclosures by an acquirer of shares in a company are an important
regulatory tool intended to serve a public purpose of disseminating this information to the
company as well as to Stock Exchange expeditiously. Such disclosures are very
important as they help investors to take an informed decision in investing in the scrip of
said company."

17. In view of the facts as discussed above and material made available on record, it
can be concluded that the noticee had failed to comply with the provisions of
Regulation 7(1A) read with Regulation 7(2) of the SAST Regulations. The text of
the said provisions is reproduced below:

"7.(1A) Any acquirer, who has acquired shares or voting rights of a company under sub-
regulation (1) of regulation 11, shall disclose purchase or sale aggregating two
percent or more of the capital of the target company to the target company, and the
stock exchanges where shares of the target company are listed within two days of
such purchase or sale along with the aggregate shareholding after such acquisition
or sale.
7.(2) The disclosure mentioned in sub-regulations (1) and (1A)] shall be made within two
days of,-
(a) the receipt of intimation of allotment of shares; or
(b) the acquisition of shares or voting rights, as the case may be."

18. The aforesaid non compliance makes the noticee liable for penalty under Section
15A(b) of the SEBI Act which is reproduced below:

"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,
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(b) to file any return or furnish any information, books or other documents within the
time specified therefor in the regulations, fails to file return or furnish the same within
the time specified therefor 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;"

19. In this regard, the provisions of Section 15J of the SEBI Act and Rule 5 of the
Rules require that while adjudging the quantum of penalty, 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.

20. With regard to the above factors to be considered while determining the quantum
of penalty, it is noted that the disproportionate gain or unfair advantage made by
the noticee or loss caused to the investors as a result of the failure on the part of
the noticee to make the disclosures are not available on record. Further, it may
also be added that it is difficult to quantify the unfair advantage made by the
noticee or the loss caused to the investors in a default of this nature.

21. At this juncture, I would like to quote the judgement of the Honble Supreme
Court of India in the matter of SEBI Vs. Shri Ram Mutual Fund [2006] 68 SCL
216(SC) wherein it was held that :
once the violation of statutory regulations is established, imposition of
penalty becomes sine qua non of violation and the intention of parties
committing such violation becomes totally irrelevant. Once the contravention
is established, then the penalty is to follow.
22. Having considered the facts and circumstances of the case, submissions made
by the noticee and after taking into account the factors under section 15J of the
SEBI Act, 1992, I find that a penalty of `2,00,000 [Rupees Two Lakhs Only] on
the noticee would commensurate with the failure on the part of the noticee in
making the disclosure in this case.
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ORDER
23. In exercise of the powers conferred under Section15 I of the Securities and
Exchange Board of India Act, 1992, and Rule 5 of Securities and Exchange
Board of India (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995, I hereby, impose a penalty of `2,00,000
[Rupees Two Lakhs Only] on the noticee, Upvan Securities Pvt. Ltd. (Currently
known as Altius Finserv Pvt. Ltd.) in terms of the provisions of Section 15A(b) of
the Securities and Exchange Board of India Act,1992 for failure to comply with
the provisions of Regulations 7(1A) read with 7(2) of the Securities and
Exchange Board of India (Substantial Acquisition of Shares and Takeover)
Regulations, 1997. In the facts and circumstances of the case, I am of the view
that the said penalty is commensurate with the failure of the noticee to make the
disclosure.

24. The penalty shall be paid by way of Demand Draft drawn in favour of SEBI
Penalties Remittable to Government of India payable at Mumbai within 45 days
of receipt of this order. The said demand draft shall be forwarded to the Chief
General Manager, CFD-DCR, Securities and Exchange Board of India, Plot No.
C4-A, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400 051.

25. In terms of the provisions of Rule 6 of the Securities and Exchange Board of
India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules 1995, copies of this order are being sent to the noticee, Upvan
Securities Pvt. Ltd. (Currently known as Altius Finserv Pvt. Ltd.) and also to the
Securities and Exchange Board of India, Mumbai.



Place: Mumbai D. RAVI KUMAR
Date: September 16, 2014 CHIEF GENERAL MANAGER &
ADJUDICATING OFFICER

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