The Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of ₹10 lakh on the promoters of Shubhlaxmi Jewel Art Limited for violating the Substantial Acquisition of Shares and Takeovers (SAST) Regulations, 2011. The adjudication order, passed by Adjudicating Officer Amit Kapoor on May 21, 2026, penalised eight individuals for failing to make a mandatory open offer after their collective shareholding exceeded the prescribed threshold. The penalty must be paid jointly and severally by the noticees within 45 days of receiving the order.

The regulatory action stems from the preferential allotment of 18,00,000 equity shares to Narendrasinh J Chauhan on May 08, 2023. This allotment followed the conversion of warrants approved by the board in November 2021. SEBI's examination revealed that the shareholding of the promoter and promoter group increased by 5.82% post-allotment, breaching the 5% limit specified in Regulation 3(2) of the SAST Regulations. Consequently, the promoters were required to make a public announcement of an open offer, which they failed to do.

Violation of SAST Regulations

The order identified that the promoters, deemed Persons Acting in Concert (PACs), held more than 25% of the voting rights prior to the allotment. Under Regulation 3(2), any acquirer holding such a stake cannot acquire additional shares entitling them to exercise more than 5% of voting rights in a financial year without making an open offer. The difference between pre-allotment and post-allotment voting rights is treated as the quantum of acquisition, which in this case exceeded the regulatory limit.

The noticees argued that the preferential allotment was undertaken to rescue the company from financial distress and benefited public shareholders, as the share price had doubled compared to the warrant issue price. They contended that there was no change of control or prejudice to public shareholders. However, the Adjudicating Officer rejected these submissions, stating that the financial intent of the transaction does not exempt compliance with the mandatory open offer requirements.

Penalty Details

SEBI imposed the penalty under Section 15H of the SEBI Act, 1992, which provides for a minimum penalty of ₹10 lakh for failure to make a public announcement or offer. The regulator noted that while no quantifiable disproportionate gain or specific loss to investors could be established, a penalty was necessary to deter future violations. The eight penalised individuals include Narendrasinh J Chauhan, Soham Narendrasinh Chauhan, Ranjitsinh Gambhirsinh Solanki, Jagrutiben N Chauhan, Jignasha Ranjitsinh Solanki, Vilasben Ashokkumar Parmar, Kajal Jitendrakumar Chauhan, and Jitendrakumar J Chauhan.

Shubhlaxmi Jewel Art Limited has informed the National Stock Exchange of India Limited that it has received requests from two members of its promoter group seeking reclassification as public shareholders. The intimation, filed on May 11, 2026, relates to requests submitted on April 27, 2026, under Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Reclassification Requests Received

The company received formal request letters from the following promoter group shareholders, both of whom currently hold nil shares and represent a nil percentage of the company's shareholding.

Both individuals have submitted their requests along with the requisite justification and confirmation of facts as mandated under the applicable SEBI regulations.

Board Consideration Scheduled

The reclassification requests are set to be placed before the Board of Directors of Shubhlaxmi Jewel Art at its ensuing meeting scheduled for May 30, 2026. Necessary action is to be taken following the Board's consideration of the matter.

Delayed Disclosure Acknowledged

The company acknowledged that the disclosure of this material event was not disseminated to the stock exchange within the prescribed timeline of 24 hours, as required under Regulation 31A(8)(a) of the SEBI LODR Regulations. The company attributed the delay to an inadvertent oversight and internal administrative lapse, stating that there was no mala fide intention or suppression of material information involved.

Upon identifying the lapse, the company stated it took immediate corrective steps to ensure the required disclosure was made to the stock exchange. Shubhlaxmi Jewel Art has also indicated that it is strengthening its internal compliance monitoring mechanism to prevent recurrence of such delays and to ensure timely adherence to all applicable provisions of the SEBI LODR Regulations. The company has requested the exchange to take the clarification on record and condone the inadvertent delay.