BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO: SBM/VB/AO/EAD-3/ 05/2015

__________________________________________________
UNDER SECTION 15 I OF SECURITIES AND EXCHANGE BOARD OF INDIA
ACT, 1992 READ WITH RULE 5 OF SECURITIES AND EXCHANGE BOARD
OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING
PENALTIES BY ADJUDICATING OFFICER) RULES, 1995
In respect of:
EMED.COM TECHNOLOGIES LIMITED
8-2-87/89, 4th Floor,
Srinivasa Plaza, Srinagar Colony
Main Road, Hyderabad - 500 082

FACTS OF THE CASE

1. An open offer was made by Mr Kamlesh Dharsibhai Koradiya and Mr Hiren
Kumar Rashiklal Doshi ( hereinafter referred

to as Acquirers ) to the

shareholders of Emed.Com Technologies Limited ( hereinafter referred to as

Noticee/ Emed/Company) , the Target Company listed at BSE, through a
public announcement dated June 17, 2013 for acquisition of 8,79,810 equity
shares of the face value of Rs 10 each representing 26% of the equity and
voting share capital of the Target Company at a price of Rs 12/- per equity
share payable in Cash.

2. Securities and Exchange Board of India (hereinafter referred to as SEBI)

while examining the letter of offer dated July 26, 2013 pertaining to the
aforesaid open offer had observed certain irregularities committed by the
Noticee and alleged that the Noticee had violated the provisions of Regulation
8 (3) of the SEBI (Substantial Acquisition of Shares and Takeovers)

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Regulations, 1997 (hereinafter referred to as SAST Regulations, 1997) for

the years 2001 to 2011. The Noticee was earlier known as CDR Industries
Ltd.
3. The trading in the shares of the Noticee was suspended by BSE on 3rd
February 2003 due to non-compliance with the provisions of the Listing
Agreement by the Noticee. The suspension was revoked by BSE w.e.f July
12, 2012.

APPOINTMENT OF ADJUDICATING OFFICER

4. SEBI vide Order dated January 23, 2014 appointed Shri D Ravikumar as the
Adjudicating Officer under Section 15 I of the Securities and Exchange Board
of India Act, 1992 (hereinafter referred to as SEBI Act) 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 Adjudication Rules) to inquire into and adjudge under the
provisions of Section 15A (b) of the SEBI Act, the violation of the provisions
of Regulation 8(3) of SAST Regulations, 1997 alleged to have been
committed by the Noticee. Consequent to the transfer of Shri D. Ravikumar, I
have been appointed as Adjudicating Officer in the matter vide an order dated
June 22, 2015.
SHOW CAUSE NOTICE, REPLY AND HEARING
5. (a) A Show Cause Notice ref. A&E/EAD-3/DRK-DS/7601/2014 dated March
11, 2014 (hereinafter referred to as SCN) was issued to the Noticee under
the provisions of Rule 4(1) of the Adjudication Rules to show cause as to why
an inquiry should not be initiated and penalty, if any, be not imposed under
the provisions of Section 15 A (b) of the SEBI Act for the alleged violation
committed by the Noticee,

as specified in the SCN. It was alleged in the

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SCN that the Noticee had violated the provisions of Regulation 8(3) of the
SAST Regulations, 1997 for the years 2001 to 2011.

(b) The SCN was sent to the Noticees address located at No.1001, 3-6286/1 & 2, Hyderguda, Hyderabad 500029 by Registered Post with
Acknowledgement Due. The SCN which was sent to the above mentioned
address of the Noticee returned undelivered with remarks unclaimed.
Subsequently, vide letter dated April 4, 2014, the SCN along with the
enclosures were sent to another address of the Noticee located at 8-2-87/89,
4th Floor, Left Hand Side, Srinivasa Plaza, Srinagar Colony, Main Road,
Hyderabad- 500 082. The above said letter dated April 4, 2014 was delivered
on the Noticee on April 10, 2014. Since there was no response from the
Noticee to the SCN, it was decided to continue with the inquiry proceedings
and a notice of Personal Hearing was sent to the Noticee on July 24, 2014
advising it to appear before the Adjudicating Officer on August 11, 2014. The
Noticee was also advised to furnish their reply to the SCN by August 4, 2014.
The letter dated July 24, 2014 was duly served on the Noticee as per the
acknowledgement received. As no response was received from the Noticee,
another notice affording opportunity of Personal Hearing was sent to the
Noticee vide letter dated August 11, 2014 advising it to appear before the
Adjudicating Officer on September 3, 2014. The said notice of hearing was
also duly served on the Noticee on August 16, 2014. It was observed that the
Noticee has neither responded to the SCN nor availed personal hearing in the
matter before the Adjudicating Officer.

(c) Pursuant to the Order dated June 22, 2015 appointing the undersigned as
the Adjudicating Officer in the said matter, a letter dated June 30, 2015 was
sent to the Noticee whereby they were advised to make written submissions
and also indicate their preference if they would require a personal hearing in
the matter by July 15, 2015. The aforementioned letter dated June 30, 2015

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was duly served on the Noticee on July 11, 2015. It was however observed
that the Noticee had failed to respond to the above said letter. Finally, in the
interest of natural justice, a final opportunity was granted to the Noticee vide
letter dated August 12, 2015 to appear before the Adjudicating Officer on
August 26, 2015. Further, in order to ensure that the Noticee is informed
about the personal hearing date well in advance, a scanned copy of the letter
dated August 12, 2015 was also sent to the designated e-mail ID of the
Noticee on August 21, 2015 and a reply on behalf of the Noticee was also
received on the same date confirming the fact that they have received the
hearing notice.

(d) Shri Kamlesh D Koradiya, the present promoter of the Noticee appeared
before me on August 26, 2015. Shri Koradiya mentioned that the Noticee did
not receive the earlier letters/communications that were addressed to them by
SEBI and cited administrative difficulties faced by the company, including
inadvertence of his staff as the reason for not receiving the earlier letters,
including the SCN issued to them. Shri Koradiya also stated that the
violations have occurred due to lapse on the part of the erstwhile
management of the company. Further, Shri Koradiya stated that the Noticee
is facing severe financial crunch and their turnover has also diminished
substantially. Shri Koradiya stated that the present management who took
over from the earlier promoters in year 2013 is taking all possible steps to
revive the company. It was further assured by Shri Koradiya that the present
management is ensuring that the Noticee is compliant with the relevant
provisions of law at all times and are now making the necessary disclosures
to the Stock Exchanges as per statutory requirements. During the course of
the hearing, on behalf of the Noticee, Shri Koradiya submitted a reply vide
letter dated August 25, 2015 and requested that a lenient view may be taken
in the matter. Shri Koradiya also mentioned that they would send a detailed
reply after the hearing.

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6. The submissions made by the Noticee in their reply vide letter dated August
25, 2015, are as follows:
(a) The Company is listed on BSE and was also listed on the Hyderabad Stock
Exchange (HSE).
(b) Company was suspended for non-compliance of the listing agreement by
the BSE on February 3, 2003 due to non-payment of the listing fees.
(c) Regulation 8 (3) of the SAST Regulations, 1997

requires yearly

disclosures regarding change in shareholding of any person holding 15 %

and above and also change in holding of every promoter of the Company.
(d) Despite the paucity of funds in running their day to day affairs, company
was regularly submitting the compliances to Stock exchanges (i.e BSE as
well as HSE). But the Company was suspended by the BSE primarily due
to non-payment of listing fees.
(e) In the year 2012, company wanted to get their suspension revoked, so they
were required to submit lots of documents as per BSEs requirement.
(f) Along with various documents, the company re-submitted the documents
relating to Regulation 8 (3) of the SAST Regulations, 1997.
(g) Subsequently, the company was taken over by the current promoters in the
year 2013.
(h) Company is still facing cash crunch to meet their day to day needs.
(i) To take a lenient view and not to impose any penalty on the company.

7. Pursuant to the hearing, the Noticee vide their letter dated September 15,
2015 reiterated the same observations which they mentioned in their earlier
reply vide letter dated August 25, 2015 and inter alia made the following
additional submissions:

(a) Company was not able to perform very well and they were not in a position
to pay the requisite fees to the Stock Exchange on demand. The Annual

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Turnover of the company for the Financial Year 2014-15 was mere Rs. 91
lacs (approx) and it has incurred a loss of Rs. 1.49 lacs. Things have not
improved in the subsequent quarters too.
(b) Company is having small business and is not even able to meet its daily
expenses and we as management are looking out for new avenues for
survival in the future. We are facing severe cash crunch and finding it very
hard to survive in the current scenario.
(c) Company was not suspended by the Exchanges after the takeover by the
new management.
(d) Finally, to take a lenient view in the matter and no penalty may be
imposed on the company.

CONSIDERATION OF ISSUES AND FINDINGS

8. I have carefully perused the facts and circumstances of the case, the
submissions of the Noticee and the documents available on record. The
issues that arise for consideration in the present case are :

a. Whether the Noticee has violated the provisions of Regulation 8 (3) of

the SAST Regulations, 1997 for the years 2001 to 2011?
b. Does the violation, if any, attract monetary penalty under the
provisions of Section 15 A (b) of the SEBI Act?
c. If so, what would be the quantum of monetary penalty that can be
imposed taking into consideration the factors mentioned in Section 15
J of the SEBI Act?

9. Before moving forward, it is pertinent to refer to the relevant provisions of

the SAST Regulations, 1997, which reads as under :

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Regulation 8
Continual Disclosure
(1) Every person, including a person mentioned in regulation 6 who
holds more than fifteen per cent shares or voting rights in any
company, shall , within 21 days from the financial year ending
March 31, make yearly disclosures to the Company, in respect of
his holdings as on 31st March.
(2)
(3) Every company whose shares are listed on a stock exchange, shall
within 30 days from the financial year ending March 31, as well as
the record date of the Company for the purposes of declaration of
dividend, make yearly disclosures to all the stock exchanges on
which the shares of the company are listed, the changes, if any, in
respect of the holdings of the persons referred to under subregulation (1) and also holdings of promoters or person(s) having
control over the company as on 31st March.
(4)

Finding

The issues for examination in this case and the findings thereon are as
follows:

(a)

Whether the Noticee has violated the provisions of Regulation

8 (3) of SAST Regulations, 1997 for the Years 2001 to 2011?

10. Regulation 8 (3) of SAST Regulations, 1997 deals with yearly disclosure that
are required to be made by the company to the stock exchange/s where the
shares of the company are listed, of the changes, if any, in respect of the
holdings of the persons referred to under Regulation 8 (1) of the SAST

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Regulations, 1997 and also the holdings of the promoters or persons having
control over the company within 30 days from ( i) The financial year ending
March 31, as well as (ii) the record date for dividend declaration

11. The Noticee being a listed company on BSE was under an obligation to
comply with the requirement of making yearly disclosures under the
provisions of Regulation 8 (3) of the SAST Regulations, 1997. Upon perusal
of the documents and material available on record, I find that the Noticee had
made the disclosures required as per Regulation 8(3) of the SAST
Regulations, 1997 with a delay, for the years 2001 to 2011. The details of
delay in making these disclosures are mentioned as under:

Sr No

Regulation

Due Date of

Actual Date of

Compliance

Compliance

Delay if
any (in no.
of days)

8(3)

30.04.2001

06.03.2012

3,960

8(3)

30.04.2002

06.03.2012

3,595

8(3)

30.04.2003

06.03.2012

3,230

8(3)

30.04.2004

06.03.2012

2,865

8(3)

30.04.2005

06.03.2012

2,500

8(3)

30.04.2006

06.03.2012

2,135

8(3)

30.04.2007

06.03.2012

1,770

8(3)

30.04.2008

06.03.2012

1,405

8(3)

30.04.2009

06.03.2012

1,040

10

8(3)

30.04.2010

06.03.2012

675

11

8(3)

30.04.2011

06.03.2012

310

12. I note from the above that the Noticee failed to make the disclosures within
the prescribed time frame for 11 years i.e. from 2001 to 2011. The disclosures
that are made by the Company under Regulation 8 (3) of the SAST

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Regulations, 1997 are made public only through the stock exchanges. It is
with this objective that SAST Regulations mandate the requirement of making
timely disclosures to the Stock exchange so that the investing public is not
deprived of the vital information. These disclosures are intended towards
investor protection and it is through these disclosures that investors are made
aware of the changes, if any, in the shareholding of the persons referred to
under sub-regulation (1) of Regulation 8 of the SAST Regulations, 1997 and
also the changes, if any in the shareholding pattern of the promoters or the
persons having control over the company. Thus, whether there is any change
in the shareholding or not, it was obligatory on the part of the Noticee to make
the disclosures to the Stock Exchange in terms of Regulation 8 (3) of the
SAST Regulations. These disclosures, if made available to the investors in a
time bound manner, would facilitate them immensely to take a balanced
investment decision in the scrip of the company. Further, the disclosures
made by the listed companies to the Stock Exchanges are the means to
attain such end and, therefore, the dissemination of complete information in a
time bound manner is required to be made by the listed companies.
However, from the aforesaid details, the Noticee has failed in their duty to
make timely disclosures required under the provisions of Regulation 8 (3) of
the SAST Regulations, 1997 for 11 consecutive years i.e. from 2001 to 2011.
As already brought out above, the Noticee has also admitted to the delayed
disclosure made by them in this regard for the period 2001 to 2011.
Therefore, I hold that the Noticee has violated the provisions of Regulation 8
(3) of the SAST Regulations, 1997.

(b)

Does the non-compliance, if any, attract monetary penalty

under Section 15 A (b) of the SEBI Act ?

13. The Noticee has submitted that the delay in making the disclosures under
Regulation 8 (3) of the SAST Regulations, 1997 was on account of the failure

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on the part of the previous management and the current management has not
defaulted in making the disclosures after they took over the company. In this
context, I would like to quote the observations of Honble Supreme Court in
the matter of SEBI Vs. Shri Ram Mutual Fund.
14. The Honble Supreme Court of India in the matter of Chairman, SEBI Vs
Shriram Mutual Fund {[2006]} 5 SCC 361} held that In our considered
opinion, penalty is attracted as soon as the contravention of the statutory
obligation as contemplated by the Act and the Regulations is established and
hence the intention of the parties committing such violation becomes wholly
irrelevant...
15. As the Noticee has made delayed disclosures to the

BSE under the

provisions of Regulation 8 (3) of the SAST Regulations, 1997 and the

violation of the provisions of Regulation 8 (3) of the SAST Regulations, 1997
by the Noticee has been established, I am convinced that it is a fit case for
imposing monetary penalty under the provisions of Section 15 A (b) of the
SEBI Act, which reads as under :
15A. Penalty for failure to furnish information, return, etc.- If any person,
who is required under this Act or any rules or regulations made there under,(a) ..
(b) to file any return or furnish any information, books or other documents within
the time specified therefore in the regulations, fails to file return or furnish the
same within the time specified therefore 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.
( c)..

(c)

If so, what would be the monetary penalty that can be imposed

taking into consideration the factors mentioned in Section 15 J of
the SEBI Act ?

16. In this regard, the provisions of Section 15J of the SEBI Act require that while
adjudging the quantum of penalty, the adjudicating officer shall have due
regard to the following factors namely;
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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

17. From the material available on record, the amount of disproportionate gain or
unfair advantage to the Noticee or the loss caused to the investors as a result
of the Noticees default is not quantifiable. Though it may not be possible to
ascertain the monetary loss to the investors on account of the default
committed by the Noticee, the details of shareholding of the persons having
substantial stake, the shareholding of the promoters /promoter-group and the
persons in control over the Noticee and timely disclosure thereof, were of
significant importance from the point of view of the investors, as such
information received by them in a time bound manner would facilitate them in
taking a balanced investment decision. Further, the purpose of these
disclosures is to bring about transparency in the transactions and assist the
Regulator to effectively monitor the transactions in the market. In view of the
belated disclosures made by the Noticee, as aforesaid, the investors were
deprived of the important information at the relevant point of time.

18. I find that the violation committed by the Noticee of the provisions of
Regulation 8 (3) of the SAST Regulations, 1997 is repetitive in nature as they
have made delayed disclosures to the Stock Exchange for 11 consecutive
years i.e from 2001 to 2011. In their submissions, the Noticee pleaded for a
lenient view to be taken in the matter.
19. I have observed that the Noticee has displayed a laid-back attitude towards
the Adjudication Proceedings initiated against them. I find that the SCN and
the hearing notices that were issued to the Noticee were duly served on them,
as evident from the postal records confirming the delivery of these

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documents. However, the Noticee did not even bother to respond to the SCN
and/or the hearing notices issued to them. Finally, when the Authorised
Representative (AR) on behalf of the Noticee appeared before me on August
26, 2015, it was mentioned by Shri Kamlesh Koradiya (the AR) that the
Noticee had not received the SCN and the hearing notices addressed to
them. Shri Koradiya cited flimsy excuses like inadvertence of their staff for not
having received the SCN and the letters at their end and consequently not
responding to the SCN and the Notices. This indicates lack of seriousness on
the part of the Noticee towards the Adjudication Proceedings.
20. I also do not find any force in the submissions put forth by the Noticee
regarding their poor financial position and suspension of their scrip by the
BSE as a reason to support their case for making delayed disclosures under
the provisions of Regulation 8 (3) of the SAST Regulations, 1997. Such
excuses made cannot provide any immunity to the Noticee from the
consequences of making delayed disclosures required under the provisions of
Regulation 8 (3) of the SAST Regulations, 1997. Moreover, the disclosures
that were required to be made by the Noticee under the provisions of
Regulation 8 (3) is a mandatory requirement and the same is not dependant
on the actual trading of the scrip of the Noticee on the Stock Exchange.
21. The Noticees submission that the instances of non-compliance / delayed
compliance with the provisions of Regulation 8 (3) of the SAST Regulations,
1997 pertaining to the years 2001 to 2011 relates to the period when the
erstwhile management was in charge of the Companys affairs also does not
hold any merit. I am of the view that the Adjudication Proceedings are initiated
against the Company for committing the default i.e the Noticee in this case
and not against the management of the Noticee. Further, it is also very
pertinent to note from the disclosures made in the Letter of Offer dated July
26, 2013 that the Noticee was very well aware of the consequences and the
liabilities that are likely to arise due to the delayed disclosures made by them

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under the provisions of Regulation 8 (3) of the SAST Regulations, 1997. In

view of the above, the argument put forth by the Noticee is not tenable.
22. Therefore, taking into consideration the facts and circumstances of the case,
the material available on record and the oral and written submissions made
by the Noticee during the course of the Adjudication Proceedings, I am of the
view that a justifiable penalty needs to be imposed upon the Noticee for their
violation of the provisions of Regulation 8 (3) of the SAST Regulations, 1997,
in order to meet the ends of justice.

ORDER

23. After taking into consideration all the facts and circumstances of the case and
also the factors mentioned in Section 15 J of the SEBI Act, as mentioned
above, I hereby impose a penalty of Rs 5,00,000/- (Rupees Five Lakhs only)
on the Noticee viz. Emed.Com Technologies Limited, which will be
commensurate with the violation committed by it.
24. The Noticee shall pay the penalty by way of Demand Draft drawn in favour of
SEBI Penalties Remittable to Government of India, payable at Mumbai,
within 45 days of the receipt of this order. The said demand draft shall be
forwarded to the Chief General Manager- CFD, Securities and Exchange
Board of India, Plot No. C4-A, G Block, Bandra Kurla Complex, Bandra (E),
Mumbai 400051.

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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 viz.
Emed.Com Technologies Limited and also to the Securities and Exchange
Board of India.

Place: Chennai
Date: 30.09.2015

SURESH B MENON
ADJUDICATING OFFICER

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