Assignment: Raasi Cements case

Submitted by: Group 7

Ankit Jain / 2019EPGP007

Gyan Prakash Nath / 2019EPGP018
Keshav Kr Jha / 2019EPGP019

List out the violations of SEBI (SAST) regulations in the case? While listing the violations
explain in detail why you think there is a violation and who committed it? For each of these
violations, give details of action that could be taken by SEBI? If there are no violations in the
case, please indicate as such.

1. Any person or PAC holding 5% or more than 5% of shares or voting rights in a

company, acquiring or disposing shares which represents 2% or more of shares
or voting of the company in a financial year have to disclose the same to the
target company and stock exchanges in which the target company is listed within
2 working days of the acquisition or disposal of shares or voting rights.

One of the Raju’s son-in-law sold roughly 4% of the company equity, to Srinivasan
and according to Raju this was done without his knowledge.

2. The regulation says that target should not sell assets, issue securities or buyback
securities, incur debt or enter into substantial contracts or agreements or modify
existing ones unless approved by special resolution of the shareholders.

Raju sold his entire 39.5% stake in SVCL to some of the promoter’s group companies
during the open offer period.

3. The regulation does not permit any difference in the price paid to the promotor
or any other class of shareholders and the common shareholder in lieu of a non-
complete agreement.

Raasi shares in SVCL were divested at Rs. 10 each, allegedly to Raju’s friends and
relations. This share transfer was detrimental to the interests of Rassi’s shareholder as
the price was Rs. 90 less per share.