Complaint against KM Birla to Sebi
Kumar Mangalam Birla didn't disclose offer to sell his stake to govt, says Vodafone Idea shareholder in his complaint
New Delhi: A shareholder of Vodafone Idea, Satya Prakash Sinha, has complained to Sebi that on June 7, when Kumar Mangalam Birla, the Chairman of Vodafone Idea Ltd (VIL), offered his stake to the government of India or any company approved by the government for free, the information was not shared with the stock exchanges.
The matter came to light on August 2 when it was reported by the media. The stock exchanges had sought clarification from Vodafone Idea on August 4.
KM Birla resigned as the Chairman of Vodafone Idea on August 4, after stock exchanges sought the clarification, the complaint said.
The stock exchanges again asked for clarification on August 5. Vodafone Idea responded on August 5 that the matter relates to the promoters and the company is not aware of the same.
Sinha said the share price of the company, which stood at Rs 10.10 on June 7, dropped to Rs 6 on August 4 -- over 40 per cent fall in just two months.
"Not sharing this price-sensitive information by the chairman and the company with the stock exchanges in compliance with the listing agreement has caused great loss to retail shareholders like me," Sinha said in his complaint.
Birla had written to Rajiv Gauba, Cabinet Secretary, government of India, offering his stake in the company to the government or any government/Indian company. At that time, Vodafone Idea share price was at Rs 10.10.
"It is submitted that the company (which includes its chairman) being a listed entity has not made the appropriate and necessary disclosure of the aforesaid events and/or information despite the same being a material information/event, within the prescribed time of 24 hours from the occurrence of the aforesaid events on June 7 and continues to be in default as on the date of making of this complaint," the shareholder said.
"In the above background, it is prayed that the Securities and Exchange Board of India initiates appropriate proceedings against the company, its directors and its key management personal under the Securities and Exchange Board of India Act, 1992 read with rules and regulations notified there under and also direct strict action to be taken by the stock exchanges on the delinquent actions of the company (which includes its chairman), as explained above," Sinha added.