sebi:EAD-5/BS/AO/20-21/2017-18

SEBI · SEBI · 2016-06-21 · Biju S, Adjudicating Officer

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Penalties imposed on Noticee No. 1 (Santowin Corporation Ltd) totalling Rs. 5,00,000/- for five violations of Clause 49 of the Listing Agreement read with Section 21 of the SC(R) Act, 1956.

Provisions invoked

• s. 23E
• s. 21
• s. 23J
• s. 23I
• s. 2(41)

Regulations relied on

• Equity Listing Agreement — 49(ia)(ii)
• Equity Listing Agreement — 49(ia)(iii)(b)
• Equity Listing Agreement — 49(iia)(i)
• Equity Listing Agreement — 49(vi)(i)
• Equity Listing Agreement — 49(vi)(ii)

Parties

• Santowin Corporation Ltd (Noticee No. 1)
• Mr. Ashok Banwarilal Gupta (Noticee No. 2)

Holding

The Noticees were held to have violated Section 21 of the SC(R) Act, 1956 read with Clauses 49(IA)(ii), 49(IA)(iii)(b), 49(IIA)(i), 49(VI)(i) and 49(VI)(ii) of the Listing Agreement, and a total penalty of Rs. 5,00,000/- was imposed on Santowin Corporation Ltd under Section 23E of the SC(R) Act, 1956.

Full text

Adjudication Order in the matter of Santowin Corporation Ltd Page 2 of 18 Balkrishan Poddar and Mr. Vinod Jagmohan Bansal (sr. nos. 4 and 5). As the Noticee no. 2 is a promoter as well as non-executive chairman, SCL must have minimum of three independent directors i.e. one-half of the board of directors. It was, therefore, alleged that the Noticees have failed to comply with the requirement of minimum number of independent directors on its Board as stipulated under Clause 49 (IA)(ii) of the Listing Agreement.

Adjudication Order in the matter of Santowin Corporation Ltd Page 3 of 18 5. While perusing the Annual Reports of SCL for Financial Year 2010-11, it was observed that there was no separate section on Corporate Governance in the said Annual Report. Further, the stock exchange, BSE informed that SCL had not provided Corporate Governance Report in its Annual Report for the year 2010-11. It was, therefore, alleged that Noticees did not comply with Clause 49(VI)(i) of the Listing Agreement.

Adjudication Order in the matter of Santowin Corporation Ltd Page 4 of 18 SC(R) Act, 1956 for the alleged contravention of the provisions of Section 21 of the SC(R) Act, 1956 and Clauses 49(IA)(ii), 49(IA)(iii)(b), 49(IIA)(i), 49(VI)(i) and 49(VI)(ii) of the Listing Agreement, by Noticee No. 1 and 2 herein.

Source: SecMarx — sebi:EAD-5/BS/AO/20-21/2017-18. 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.