Wadia Family, Bombay Burmah Trading and 13 Others Pay Rs2.13 Crore To Settle Disclosure Violation Case with SEBI
Moneylife Digital Team 13 January 2025
Bombay Burmah Trading Corporation, along with its promoters Nusli Wadia and his sons Ness Wadia and Jehangir Wadia, as well as 14 others, have settled regulatory proceedings with the Securities and Exchange Board of India (SEBI) by paying a settlement amount of Rs2.13 crore.  
 
The other entities are: Maureen Nusli Wadia, Nowrosjee Wadia & Sons Ltd, Heera Holdings and Leasings Pvt Ltd, Macrofil Investments Ltd, Naperol Investments Ltd, Nidhivan Investment and Trading Company Pvt Ltd, Nessville Trading Pvt Ltd, Varnilam Investments and Trading Company Ltd, National Peroxide Ltd, Go Investments & Trading Pvt Ltd, Sahara Investments Pvt Ltd, NN Wadia Administrator of Estate of Lt EF Dinshaw, The Bombay Dyeing & Manufacturing Company Ltd and Wallace Brothers Trading & Industrial Ltd.
 
The matter involved alleged violations of multiple SEBI regulations and has now been resolved. According to SEBI's order, the Wadias opted for a settlement without admitting or denying the regulator's findings of fact and conclusions of law. The settlement amount was determined by a high-powered advisory committee (HPAC) and subsequently approved by SEBI panel of whole-time members (WTM).  
 
The case centred on alleged lapses in disclosures related to changes in shareholding and related-party transactions. SEBI noted that Wallace Brothers Trading & Industrial, which held an 8.11% stake in Bombay Burmah Trading, was wrongly classified as a public shareholder rather than being disclosed as part of the promoter group. 
 
This omission also resulted in a violation of accounting standards and regulatory norms, as Wallace Brothers was not identified as a related party of Bombay Burmah Trading Corporation.  
 
The Wadias also had indirectly acquired the 8.11% stake in December 2014 through Wallace Brothers, bringing their total holding to 74.04%. Since this acquisition exceeded the 5% threshold, it triggered the requirement for an open offer. However, SEBI acknowledged that conducting an open offer at current market prices would be disadvantageous to the shareholders.  
 
The market watchdog further added that there was a delay of over 3,000 days in disclosures under the respective regulations.
 
The settlement terms required payment of Rs1.46 crore by the promoters and affiliated entities, Rs34.70 lakh by Wallace Brothers Trading & Industrial and Rs31.00 lakh by Bombay Burmah Trading.
 
SEBI's panel of WTMs accepted the HPAC's recommendations on 8 November 2024. The applicants remitted the settlement amounts by 18 December 2024, which SEBI confirmed as received.
 
This settlement concludes SEBI's proceedings against the applicants for the stated violations. However, SEBI says it retains the right to initiate action under Settlement Regulations if subsequent breaches or misrepresentations come to light.
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