NGL Fine-Chem, 3 Related Entities Pay Rs92 Lakh To Settle Case with SEBI

Moneylife Digital Team 26 February 2025

Investor Interest

Market regulator Securities and Exchange Board of India (SEBI) has approved a settlement of Rs92.21 lakh in a case involving NGL Fine-Chem Ltd (applicant 1) and three other related entities. The settlement resolves proceedings related to alleged violations of SEBI regulations concerning shareholding disclosures.

The other applicants in the case include: PCI Ferrmone Chemicals (India) Pvt Ltd (applicant 2), Rajesh Lawande (applicant 3) and Rahul Nachane (applicant 4).

The case was triggered by discrepancies in the company's shareholding filings and other compliance issues. After discussions and negotiations, SEBI and the applicants reached a settlement agreement.

The matter began when NGL Fine-Chem submitted an exemption application to SEBI on 22 July 2022. The company sought an exemption from the requirement to make an open offer after acquiring shares via a settlement in favour of trustees.

On reviewing the application, SEBI noted that the shareholding of NGL Fine-Chem's promoter group had increased from 65.45% in June 2019 to 73.83% in September 2019. During the investigation, SEBI found errors in the shareholding disclosures. Specifically, PCI Ferrmone Chemicals, a promoter group company holding 8.38% of the shares, was incorrectly listed as a public shareholder instead of a promoter entity.

This error was present across 31 quarters from December 2002 to June 2019. As a result, SEBI determined that NGL Fine-Chem had violated several provisions under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations).

In addition to the errors in the company's shareholding disclosures, SEBI found that the promoters, Mr Lawande and Mr Nachane, had failed to disclose PCI Ferrmone Chemicals shareholding as part of the 'persons acting in concert' under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations) from FY11-12 to FY18-19.

Furthermore, PCI Ferrmone Chemicals did not make its annual shareholding disclosures under the SAST Regulations during this period. SEBI appointed an adjudicating officer (AO) to investigate the matter and on 29 December 2023, issued a show cause notice (SCN) to the applicants.

On 15 October 2024, the applicants met with SEBI's internal committee (IC) to discuss the settlement terms. The IC initially proposed a settlement amount of Rs54.42 lakh for NGL Fine-Chem and Rs12 lakh each for PCI Ferrmone Chemicals, Mr Lawande and Mr Nachane. The high-powered advisory committee (HPAC) of SEBI considered the revised settlement terms proposed by the applicants.

SEBI issued a settlement order disposing the adjudication proceedings under Section 15JB of the SEBI Act. The settlement has been finalised, with a total payment of Rs92.21 lakh made by the applicants to SEBI, thereby resolving the case in accordance with SEBI's regulations.

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