SEBI Imposes Rs 7 Lakh Fine On Shapoorji Pallonji and Company For Flouting Disclosure Rules

The market regulator revealed that the company didn’t take prior approval from the exchange for converting non-convertible debentures (NCDs) into a term loan back in March 2021. 

The Securities and Exchange Board of India levied a penalty of Rs 7 lakh on Shapoorji Pallonji and Company for violating the disclosure norms. The market regulator in it’s order passed on Thursday revealed that the company didn’t take prior approval from the exchange for converting non-convertible debentures (NCDs) into a term loan back in March 2021. 

SEBI further detailed that the company failed to provide an auditor’s certificate on funds utilisation, a half-yearly certificate on asset cover maintenance, and an annual report to the debenture trustee, reported PTI. 

Further, SEBI noted in it’s 64-page order that the company didn’t update certain information on it’s website as mandated under the Listing Obligations and Disclosure Requirements (LODR) Regulations. These details include a notice of the meeting of the board of directors to discuss financial results, a full copy of the annual report after the fiscal year 2019-20, financial results, and information, reports, notices, call letters, circulars, and such regarding NCRPS or NCDs. Additionally, the regulator noted that all information and reports including compliance reports filed by the company were not available on the website. 

As a result of failing to make these disclosures, the company violated the LODR provisions and therefore, SEBI levied a Rs 7 lakh penalty on the company, the report noted.

Notably, the regulator started it’s examination after it received a letter Shapoorji Pallonji and Company in July 2021. The letter intended to inform SEBI that the company had converted it’s listed NCDs to term loan in March 2021 as per the One Time Resolution (OTR) plan executed between the company and it’s lenders. This led to SEBI investigating the compliance status of LODR rules by the company.

Shapoorji Pallonji and Company is an Indian conglomerate operating in construction, real estate, textiles, home appliances, shipping, power, publications, biotechnology and other areas. The company is also a stakeholder in Tata Sons with about 18 per cent share.