SEBI fines Unilever, Indian associates Rs50 lakh for tardy disclosures

The Securities & Exchange Board of India today imposed a fine of Rs50,00,000 on UK-based Unilever Plc and six other promoter entities of its Indian arm Hindustan Unilever Ltd (HUL) saying they failed to make mandatory shareholding disclosure within the stipulated time.

The delay in disclosure of shareholding data was found on as many as five occasions between 2006 and 2010, with the delays ranging from four days to 31 days.

In its order, SEBI directed seven promoters of HUL to pay the penalty within 45 days.

The main promoter Unilever Plc, which holds a 51.53 per cent stake, has been asked to pay a fine of Rs8,00,000, while six other promoters - Brooke Bond Group Ltd, Unilever Overseas Holdings AG, Unilever UK & CN Holdings Ltd, Brooke Bond South India Estates Ltd, Unilever Overseas Holdings BV and Brooke Bond Assam Estates Ltd - have been slapped with fines of Rs7,00,000 each.

Together these seven promoters hold 67.25 per cent stake in HUL.

The Indian market regulator said while the amount of gain or unfair advantage to these entities, or loss caused to investors, cannot be ascertained as the result of the default is not quantifiable, the default was of repetitive nature and the details of the shareholding and their timely disclosure were of significant importance for investors.

"The disclosures obligations under SAST (Substantial Acquisition of Shares and Takeover) Regulations are critical and an important component of the legal regime governing substantial acquisition of shares and takeovers.

"In the absence of these timely disclosures, the investors will be deprived of important information at the relevant point of time. It is also evident that the Noticees have committed the defaults on more than one occasion and as such, the default on the part of the Noticees is repetitive in nature," SEBI said.

The regulation breached by these entities require that a promoter or every entity having control over a company shall, within 21 days from the financial year ending 31 March, as well as the record date of the company for the purpose of declaration of dividend, disclose the number and percentage of shares or voting rights, held directly or by persons acting in concert, in that company.