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CS Executive · Capital Market and Securities Laws · Acquisition of Shares and Takeovers - Concepts

Arjun Holdings fails to disclose the aggregate of its existing shareholding in a body corporate before acquiring further shares, though the regulations require such disclosure. Under Section 15H, what is the penalty range?

The penalty is not less than ten lakh rupees but may extend to twenty-five crore rupees or three times the profits made from the failure, whichever is higher. This applies to failure to disclose aggregate shareholding before acquiring shares.

  1. ANot less than ten lakh rupees, extending to twenty-five crore rupees or three times the profits made from the failure, whichever is higherCorrect
  2. BNot less than one lakh rupees, extending to twenty-five crore rupees or three times the profits, whichever is lower
  3. CA fixed penalty of twenty-five crore rupees in every case
  4. DNot less than ten lakh rupees, extending to ten crore rupees or the profits made, whichever is higher

Explanation

Section 15H lists failure to disclose aggregate shareholding before acquisition as a default. The penalty is minimum ten lakh rupees, maximum twenty-five crore rupees or three times the profits from the failure, whichever is higher. The 'lower' and fixed-amount options misstate this.

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