Case Overview

This adjudication order addresses violations of SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015 and Substantial Acquisition of Shares and Takeovers (SAST) Regulations, 2011 by three noticees.

Parties Involved:

  • Noticee 1: Vedic Ayurveda Ltd (formerly KD Leisures Limited, PAN: AAACV0043P)
  • Noticee 2: Arminder Singh (PAN: BLLPS6101B)
  • Noticee 3: Priyanka Jain (PAN: BAZPJ9596E)

Background of Proceedings:

The matter originated from an open offer made by Sunayna Investment Company Limited (SICL) to acquire up to 26% shares of KD Leisures Limited (now Vedic Ayurveda Ltd) through a public announcement on March 7, 2020. The open offer period commenced on August 4, 2020 and closed on August 17, 2020, with only 11.89% shares tendered against the intended 26% acquisition.

Principal Allegations:

Against Noticee 1 (Vedic Ayurveda Ltd):

  • Violation of Regulation 31A(2) and 31A(3) of LODR Regulations: Failure to follow requisite procedures for reclassification of promoter Kalpak Vohra HUF from promoter to public category
  • Violation of Regulation 31(1) and 31(4) read with Regulation 4(1)(e) of LODR Regulations: Filing incorrect shareholding patterns for 5 quarters (September 2020 to December 2021) showing Kalpak Vohra HUF (holding 4.63% shares) under public category without proper reclassification
  • BSE confirmed neither the HUF nor the Company made any request/application for promoter to public reclassification

Against Noticee 2 (Arminder Singh):

  • Violation of Regulation 29(1), 29(2) read with Regulation 29(3) of SAST Regulations: Failure to make mandatory disclosures for 6 transactions between December 2021 and March 2022:
  • December 9, 2021: Acquired 385,241 shares (12.10% holding) - No disclosure under Regulation 29(1)
  • January 5, 2022: Sold 33,500 shares (9.91% holding) - No disclosure under Regulation 29(2)
  • January 17, 2022: Sold 20,000 shares (7.67% holding) - No disclosure under Regulation 29(2)
  • January 24, 2022: Sold 48,626 shares (4.54% holding) - No disclosure under Regulation 29(2)
  • February 26, 2022: Acquired 150,000 shares (8.71% holding) - Delayed disclosure by 1 day
  • March 16, 2022: Sold 100,000 shares (4.39% holding) - No disclosure under Regulation 29(2)
  • BSE attempted multiple contacts through emails and phone numbers but received no response

Against Noticee 3 (Priyanka Jain):

  • Violation of Regulation 29(1), 29(2) read with Regulation 29(3) of SAST Regulations:
  • August 30, 2021: Purchased 385,241 shares from SICL - Disclosure due by September 1, 2021, but made only on November 23, 2023 (813 days delay)
  • December 9, 2021: Sold 385,241 shares - Disclosure due by December 13, 2021, but made only on February 25, 2022 (74 days delay)
  • Noticee 3 had applied for summary settlement which failed as she didn't remit settlement amount within 30 days

Noticees' Defenses:

All noticees raised multiple technical defenses including:

  • Jurisdictional challenges claiming SCN was issued without proper procedure
  • Violation of natural justice due to redacted examination report and non-disclosure of enforcement policy
  • Inordinate delay in issuance of SCN (violations from 2020-2022, SCN issued in 2025-2026)
  • Denial of parity claiming other entities received administrative warnings for similar violations
  • COVID-19 pandemic disruptions affecting record maintenance
  • Claimed they had made disclosures but couldn't produce evidence due to time lapse

Authority's Findings on Technical Defenses:

  • Jurisdictional challenge rejected: Proper procedure followed under Rule 4(1) and 4(3) of Adjudication Rules
  • Natural justice complied: Complete unredacted examination report provided on July 6, 2026
  • Delay justification: Violations came to SEBI's notice through BSE report on February 23, 2024; examination report approved March 17, 2025; SCN issued June 2025 - within reasonable time
  • Parity argument rejected: Different circumstances - Noticee 2 showed continued non-compliance and non-cooperation
  • COVID-19 argument rejected: No exemption provided for disclosure requirements during pandemic

Substantive Findings:

  • Noticee 1 found guilty of all LODR violations - failed to follow reclassification process and filed incorrect SHP for 5 quarters
  • Noticee 2 found guilty of all SAST violations - failed to make 5 disclosures entirely and made 1 disclosure with 1-day delay
  • Noticee 3 found guilty of both SAST violations - made disclosures with substantial delays of 813 days and 74 days

Final Outcome

Penalties Imposed:

1. Vedic Ayurveda Ltd: ₹300,000 under Section 15HB of SEBI Act, 1992 for LODR violations

2. Arminder Singh: ₹200,000 under Section 15A(b) of SEBI Act, 1992 for SAST violations

3. Priyanka Jain: ₹100,000 under Section 15A(b) of SEBI Act, 1992 for SAST violations

Total Penalty: ₹600,000 (Six Lakh Rupees)

Payment Directive: Amount must be paid within 45 days of order receipt through SEBI's online payment portal. Failure to pay will lead to recovery proceedings under Section 28A of SEBI Act.

Topics: SEBI Enforcement, Disclosure Violations, Takeover Regulations