New Delhi, April 10 (IANS) Markets regulator SEBI has said in an order that the larger public purpose of investor protection would stand defeated if the violators are allowed to go scot-free just because of delay in initiating action against them.
The SEBI said this in an adjudication order where it imposed a penalty of Rs 2 lakh on Williamson Magor and Company Ltd (WMCL).
“It is to be noted that the SEBI Act, 1992, and the regulations framed thereunder, have got a larger public purpose in the form of investor protection and the regulation and development of the securities market. These purposes would stand defeated if the violators are allowed to go scot-free just because of a delay in initiating action against them,” SEBI said.
“In view of the above facts, I find that no prejudice has been caused upon the noticee nor has it been able to clearly make out a case of prejudice due to the alleged delay in the initiation of proceedings,” the order read.
It was alleged in the complaint that WMCL entered into a related party transaction with Babcock Borsig Ltd., its associate company, involving the sale of 1,13,360 shares (‘transaction’) of Woodlands Multispecialty Hospital Ltd, without corporate approvals and without making appropriate disclosures under the accounting standards.
In this regard, it was noted in the SCN that the noticee as per Clause 49 (VII) (D) of the erstwhile Equity Listing Agreement, prior approval of the audit committee was required for RPTs undertaken by the noticee from October 1, 2014, onwards.
However, the noticee in its reply to SEBI submitted that board approval was taken and approval of the audit committee was not required for the transaction, therefore, prior approval of the audit committee was not taken for the transaction with Babcock Borsig Ltd.
“In the present matter based on the findings of the examination, it has been established that the noticee has not complied with the requirements of the erstwhile Equity Listing Agreement. The noticee was under a statutory obligation to abide by the provisions of the erstwhile Equity Listing Agreement, which it failed to do in relation to the said related party transaction.
“The said violations by the noticee attract a monetary penalty. Therefore, I feel it appropriate to levy a penalty which is commensurate with the nature of the violation, which acts as a deterrent factor for the noticee and others in protecting the interest of the investor in the securities market,” SEBI said.
–IANS
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