The Securities and Exchange Board of India (SEBI) has ordered Mr. Rajiv R. Kotia, promoter of Sungold Capital Ltd., to sell 1.54% of shares held in excess of regulatory limits and deposit the proceeds in SEBI’s Investor Protection and Education Fund (IPEF). Four other family members — Shilpa, Shweta, Dhaval, and Ravi Kotia — have been barred from the securities market for three months.
This order, dated October 8, 2025, marks the conclusion of an 18-year-old case related to violations of SEBI’s 1997 Takeover Regulations.
What Led to the SEBI’s Order
The case dates back to 2007, when SEBI alleged that the Kotia family — promoters of Sungold Capital, a BSE-listed company engaged in media, trading, and finance — acquired shares without making a mandatory open offer to minority shareholders.
According to SEBI, Rajiv Kotia’s stake rose from 11.96% to 16.53% between April and July 2007, crossing the 15% open offer threshold under Regulation 10 of the SAST Regulations, 1997. Meanwhile, other family members collectively raised their holding to 22.39%, pushing the group’s total to 38.92%, violating Regulation 11(1).
A Legal Journey Through Multiple Appeals
The Kotias’ regulatory tangle has traversed a long legal trail:
- 2020: SEBI imposed penalties totalling ₹21 lakh and ordered a combined open offer to shareholders.
- 2022: The Securities Appellate Tribunal (SAT) upheld SEBI’s findings.
- 2024: The Supreme Court revived the review plea, directing SAT to reconsider SEBI’s open offer order in light of the Sunil Krishna Khaitan judgment, which discouraged delayed open offers.
- April 2025: SAT set aside SEBI’s open offer directive but confirmed the family’s regulatory violations, asking SEBI to pass “fresh directions.”
SEBI’s Final Decision
In its October 8, 2025 order (WTM/AN/IVD/ID5/31713/2025-26), SEBI member Ananth Narayan G. reviewed the matter afresh. Citing inordinate delay (18 years) and limited impact on investors, SEBI dropped the open offer directive and instead issued these directions:
- Rajiv Kotia must sell the 1.54% excess shares in Sungold Capital — equivalent to 14,077 shares — and deposit the proceeds with the IPEF within three months.
- Shilpa, Shweta, Dhaval, and Ravi Kotia are restrained from accessing or dealing in the securities market for three months.
- The show-cause notice issued in 2019 has been formally disposed of.
The Bigger Picture Involving Sungold Capital
Sungold Capital’s case mirrors a series of delayed takeover disputes from the 2000s still winding through SEBI’s enforcement system. With this order, SEBI seeks to “give quietus” to an old compliance lapse while upholding the principle of proportional accountability.
The order is now effective immediately, with directions to notify relevant exchanges and depositories for compliance.
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