Market regulator Sebi has disposed of adjudication proceedings against actor Shilpa Shetty Kundra and her businessman husband Raj Kundra in a case related to alleged disclosure lapses.

It was alleged that the couple had violated the provisions of Sebi (Substantial Acquisition of Shares and Takeovers) Regulations) or SAST rules in the matter of Viaan Industries.

"The change in the shareholding of the noticees (couple) did not require any disclosures to be made by them in terms of... SAST Regulations and the allegation levelled in the showcause notice (SCN) that noticees have violated the provisions of... SAST Regulations is not sustainable," Sebi said in an order dated July 30.

The regulator had conducted an investigation into the dealings in the scrip of Viaan Industries (formerly known as Hindustan Safety Glass Industries Ltd), during the period September, 2013 to December, 2015.

Shilpa Shetty Kundra and Ripu Sudan Kundra, who is also known as Raj Kundra, became the promoters of Viaan Industries pursuant to their individual acquisition of 25.75 per cent shareholding in the company during the period March 2015.

It was further observed that, in October 2015, the company came out with a preferential allotment of 5 lakh equity shares. The shares were allotted to four persons including the couple who were allotted 1,28,800 shares each in the preferential allotment made by the company.

Pursuant to the allotment of the shares, it was alleged that the shareholding of the couple in the company had undergone change and therefore, they were required to make the necessary disclosures to the stock exchange, BSE, and to the company under the SAST norms.

However, they had allegedly failed to make the necessary disclosures within the stipulated time period.

Consequently, adjudication proceedings were initiated against Kundras and SCN was issued to them in April 2021.

Sebi noted that change in the collective shareholding of the couple after the preferential allotment was only 0.02 per cent and it had changed by 0.01 per cent when seen in the context of the individual acquisition of shares by Shilpa Shetty Kundra and Raj Kundra.

Thus, the change in their shareholding after the preferential allotment was well within the threshold limit prescribed under the rules and this change in shareholding did not warrant any disclosures to be made by them, the regulator added.

Accordingly, the regulator has disposed of "the adjudication proceedings initiated against the noticees viz. Ripu Sudan Kundra and Shilpa Shetty Kundra vide SCN dated April 26, 2021".

On July 28, Sebi slapped a fine of Rs 3 lakh on Shilpa Shetty Kundra, Raj Kundra and Viaan Industries for disclosure lapses and consequent violation of insider trading norms.