MUMBAI: Capital market watchdog Sebi has disposed of the case against Ethelbari Tea Company's three promoters in a matter related to delay in filing disclosures with the stock exchanges.

A show cause notice by Securities and Exchange Board of India had alleged that Chandra Prakash Kanoi, Santosh Kumar Kanoi and Nirmal Kumar Kanoi had acquired certain number of Ethelbari Tea Company's shares from their father but had failed to disclose the details to the bourses within the stipulated time.

In an order dated April 29, Sebi noted that the shares were "transmitted to the noticees from their late father by way of operation of law".

Further, it observed that the Companies Act distinguished "transmission of shares from transfer of shares. Execution of transfer deed is not required in case of transmission of shares.

"Further, while transfer of shares relates to a voluntary act on the part of the shareholder, tansmission is brought about by the operation of law".

Accordingly, Sebi said that it was inclined to take "a lenient view in the matter and thus conclude that transmission of shares, sans any voluntary act on the part of the promoters is not a fit case for imposition of monetary penalty".

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