sebi:EAD-2/DSR/RG/147/2014
Facts / Headnote
Penalty imposed on Noticee for violation of Regulation 95 of ICDR Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations relied on
- SEBI (ICDR) Regulations, 2009 — 95
Parties
- ABM International Limited
Holding
The Noticee, ABM International Limited, violated Regulation 95 of the ICDR Regulations by delaying the implementation of a bonus issue by more than five months beyond the prescribed timeline, and is liable for a monetary penalty of Rs. 5,00,000 under Section 15HB of the SEBI Act.
Full text
Page 2 of 6 Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as the ‘Adjudication Rules’) to inquire into and adjudge under Section 15HB of the Act the alleged violation of the abovementioned provisions of the ICDR Regulations by the Noticee.
Page 3 of 6 6. Before moving forward, it will be appropriate to refer to the relevant provisions of ICDR Regulations which read as under:- Relevant provisions of ICDR Regulations: Completion of bonus issue. 95(1) An issuer, announcing a bonus issue after the approval of its board of directors and not requiring shareholders' approval for capitalization of profits or reserves for making the bonus issue, shall implement the bonus issue within fifteen days from the date of approval of the issue by its board of directors: Provided that where the issuer is required to seek shareholders' approval for capitalization of profits or reserves for making the bonus issue, the bonus issue shall be implemented within two months from the date of the meeting of its board of directors wherein the decision to announce the bonus issue was taken subject to shareholders' approval. (2) Once the decision to make a bonus issue is announced, the issue cannot be withdrawn.
Page 4 of 6 March 14, 2013 i.e. appx after 7 and a half months from the time of approval of the said issue by the Board of Directors (July 27, 2012). Further, DSE also advised the Noticee to submit the Listing Application for listing of the new securities issued as Bonus shares. Thereafter, March 15, 2013 was kept as the revised record date for the purpose of Bonus Issue and accordingly, the Noticee allotted 14,70,000 equity shares at its Board Meeting held on March 23, 2013. The same was intimated to DSE vide letters dated March 05, 2013 and March 11, 2013. I find that ABM vide its letter dated July 25, 2013 had requested SEBI for condoning the said delay and grant approval for completing the exercise of listing of the said Bonus Shares. The reason stated by the Noticee for the said delay was "oversight" which is alleged to be negligence on the part of the Noticee in complying with the ICDR Regulations. Therefore, it was alleged that the Noticee had violated the provisions of Regulation 95 of the ICDR Regulations.
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Source: SecMarx — sebi:EAD-2/DSR/RG/147/2014. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.