SEBI Cracks Down On Omaxe And Promoter-Linked Entities, Market Ban Follows Minimum Public Shareholding Breach

Mumbai: The Securities and Exchange Board of India (SEBI) has barred Omaxe Ltd and several promoter-linked entities from the securities market after finding that funds connected to the real estate company were used to buy its shares during 2013 offer-for-sale transactions.

In its order, SEBI said the purchases created a misleading impression that Omaxe had met minimum public shareholding (MPS) requirements. These rules require listed companies to maintain a prescribed level of ownership outside the promoter group.

How The Funds Moved

According to the regulator, ₹46.5 crore originating from Omaxe and group entities was routed through DVM Realtors, Garv Buildtech and Jeet Builders to entities that bought Omaxe shares.

The purchases took place during two offer-for-sale tranches on June 3 and October 29, 2013. SEBI concluded that Omaxe had indirectly financed the acquisition of its own shares, affecting the accuracy of its reported public shareholding.

Market Restrictions Imposed

SEBI restrained Omaxe from accessing the securities market for three months. Promoter Rohtas Goel, his brothers Sunil Goel and Jai Bhagwan Goel, and promoter-linked firms Dream Home Developers and Guild Builders face one-year restrictions.

During their respective debarment periods, the parties cannot buy, sell or otherwise deal in securities, including mutual fund units, directly or indirectly. They are also barred from associating with the securities market.

Penalties And Open Positions

The regulator imposed a ₹27 lakh penalty on Omaxe. Rohtas, Sunil and Jai Bhagwan Goel were fined ₹37 lakh each, while Dream Home Developers and Guild Builders were fined ₹27 lakh each.

The order permits the parties to close existing exchange-traded derivative positions within three months or by the contracts’ expiry, whichever comes first.