New Delhi, May 29
Markets regulator Securities and Exchange Board of India (SEBI) has slapped a Rs 5 lakh penalty on packaging products company AGI Greenpac for "failure to provide accurate, adequate, and explicit disclosure resulting in misrepresentation to the stock exchanges".
The SEBI order charged the company for withholding crucial information regarding its deal to acquire Hindustan National Glass (HNG), India's oldest and largest container glass-making company.
According to the order, it was observed that AGI Greenpac also failed to disclose material developments with respect to disclosures made by it to the exchanges "dated October 31, 2022, and March 16, 2023".
The SEBI said that the company failed to disclose crucial information related to a show-cause notice issued by the Competition Commission of India (CCI) to it, submission of modification to the application filed by AGI to the CCI and litigation related to the CCI order approving the proposed combination of AGI and HNG.
Between April and October 2023, the AGI stock saw 236 per cent gains -- from a low of Rs 334 to a high of Rs 1,089.
AGI's acquisition of HNG was to make it the largest player in the container glass industry in the country. However, the CCI formed a prima facie opinion that the proposed transaction was likely to cause an appreciable adverse effect on competition (AAEC) in relevant markets.
Before the SEBI order, Justice Vikramajit Sen, the former Chief Justice of the Karnataka High Court and judge of the Supreme Court, had opined that AGI made "partial and deceitful disclosure" about the CCI approval.
"In the event of failure to pay the said amount of penalty within 45 days of the receipt of this order, SEBI may initiate consequential actions including but not limited to recovery proceedings under Section 28A of the SEBI Act, 1992 for the realisation of the said amount of penalty along with interest thereon, inter alia, by attachment and sale of movable and immovable properties," read the order.
The AGI Greenpac stock closed at Rs 667.35 a piece, down 2.85 per cent, on Tuesday.