Sebi has imposed a penalty totalling Rs 20 lakh on Future Corporate Resources, Kishore Biyani and 13 others for failing to make a public announcement of an open offer to the shareholders of Praxis Home Retail.

They have been asked to pay the fine within 45 days, the Securities and Exchange Board of India (Sebi) said in its order.

Sebi found that Future Corporate Resources Pvt Ltd (FCRL) along with 14 entities failed to make a public announcement of an open offer following the increase in the shareholding of FCRL in Praxis.

Praxis' equity shares aggregating to 30 lakh were allotted to one of its promoter entities FCRL, following the exercise of the conversion option of 3,180 compulsorily convertible debentures (CCDs) by FCRL, out of the 7,500 CCDs initially allotted to it.

After exercising the conversion option, the shareholding of FCRL in Praxis rose from 47.43 per cent in the quarter ended December 2019 to 53.13 per cent, an increase of 5.71 per cent in shareholding as of February 11, 2020.

"As the increase in shareholding of FCRL in Praxis post-allotment is 5.71 per cent, which is more than five per cent, FCRL along with the other Noticees (PACs) allegedly were required to make a public announcement of the open offer under...SAST (Substantial Acquisition of Shares and Takeovers) Regulations," Sebi said in its order passed on Friday.

However, Sebi noted that "Noticees (15 entities) did not make a public announcement of the open offer, till date, in the instant matter" and violated the provisions of SAST norms.

SAST regulations were triggered in respect of the allotment of shares and the subsequent increase in the shareholding of FCRL. The rule mandates that the acquirer and persons acting in concert with it will be jointly and severally responsible for the fulfilment of the obligation.

One of the purposes of obligations in respect of an open offer is to provide an exit option to the shareholders other than the promoters of the target company, Sebi said.

Accordingly, Sebi has levied a fine of Rs 10 lakh on FCRL and Rs 10 lakh together on 14 entities -- Kishore Biyani, Akar Estate and Finance, Surplus Finvest, Retail Trust, Anil Biyani, Ashni Kishore Biyani, Avni Biyani, Gopikishan Biyani, Laxminarayan Biyani, Rakesh Biyani, Sangita Biyani, Sunil Biyani, Vijay Biyani and Vivek Biyani.

These 15 entities constitute the promoter and promoter group entities of Praxis before and after the allotment of the shares pursuant to the exercise of conversion of CCDs.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.