SEBI Slaps Rs6 Lakh Penalty on 10 Lohia Group Entities for Shareholding Disclosure Lapses in Elegant Floriculture & Agrotech
Moneylife Digital Team 24 January 2025
Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs6 lakh on the Lohia Group, comprising 10 entities, for violating the SEBI -Substantial Acquisition of Shares and Takeovers Regulations (SAST Regulations). The Lohia group failed to make mandatory disclosures regarding changes in its shareholding in Elegant Floriculture & Agrotech India Ltd (EFAIL).  
 
The ten entities penalised include Rounak Lohia (noticee 1), Niwas Lohia Sons Hindu undivided family-HUF (noticee 2), Vikash Lohia HUF (noticee 3), Shreenarayan Lohia Sons HUF (noticee 4), Amit Lohia HUF (noticee 5), Rounak Lohia HUF (noticee 6), Rakhi Lohia(noticee 7), Saloni Lohia (noticee 8), Puspa Devi Lohia (noticee 9) and Colorshine Hosiery Pvt Ltd (noticee 10).
 
In an order issued by Amar Navlani, SEBI’s adjudicating officer (AO) noted that Lohia group failed to disclose their shareholding changes on eleven occasions.  
 
SEBI investigation revealed that the group, led by Rounak Lohia, acted as persons acting in concert (PACs) during their trading activities. The group’s shareholding in EFAIL incrementally increased to 22.62% of the company’s total shares before being reduced to less than 2% by April 2022.  
 
Under the SAST Regulations, acquisitions or significant changes in shareholding require timely disclosure to the stock exchange and the target company. However, the Lohia group did not file the necessary disclosures, thereby violating Regulations 29(1), 29(2), and 29(3) of the SAST Regulations.  
 
During the investigation, Rounak Lohia admitted to the lapses on behalf of the group and attributed the non-compliance to ignorance of SEBI regulations. He claimed the violations were unintentional and due to a lack of formal knowledge about the disclosure requirements.  
 
SEBI, however, stressed that ignorance of the law is not a valid excuse. The AO of SEBI reiterated that a robust disclosure regime is essential for ensuring market transparency and orderly functioning. While the AO found no evidence of disproportionate gains or investor losses stemming from the violations, the failure to make timely disclosures was seen as undermining the regulatory framework.  
 
Consequently, SEBI imposed a joint and several penalties of Rs6 lakh on all 10 entities.
 
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