sebi:EAD-7/BD/NR/2019-20/7079-82

SEBI · SEBI · 2016-03-10 · B J Dilip, Adjudicating Officer

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Facts / Headnote

Noticees 1, 2 and 3 held liable for violation of Clause 49(I)(D)(i) of the Listing Agreement; Noticee 4 given benefit of doubt and not held liable; penalties imposed under Sections 23E and 23H of SCRA read with Rule 5 of SCR Adjudication Rules

Provisions invoked

Parties

Holding

The Adjudicating Officer held that Noticees 1, 2 and 3 violated Clause 49(I)(D)(i) of the Listing Agreement by failing to fairly inform shareholders about the allocation of an exorbitant Boat Club Road property to the Managing Director as residential accommodation, while Noticee 4 (independent director) was granted benefit of doubt and not held liable.

Full text

Adjudication Order in respect of S V Global Mills Ltd., Page 2 of 27 Mr. S Natarajan also filed petition under sections 397, 398, 399, 402, 403, 406, 237 read with sections 539 to 544 of the Companies Act, 1956 through his various companies. These petitions were filed on account of the alleged acts of oppressions and mismanagement by SVGML, M Ethiraj (“Noticee 2”) and E Shanmugam (“Noticee 3”) before the Company Law Board (CLB). The CLB passed an order dated March 10, 2016 directing the Company inter-alia to ensure proper compliance of law and transparency that the property located at New no.5, Old No. 3, III Avenue, Boat Club Road, Chennai-600 028 was allocated to Managing Director for his residential usage, to get the same rectified. The CLB order was challenged before High Court of Madras by the Noticees 1, 2, and 3.

Adjudication Order in respect of S V Global Mills Ltd., Page 3 of 27 4. SVGML vide letter dated June 16, 2017 submitted its reply, which is summarized hereunder:

Adjudication Order in respect of S V Global Mills Ltd., Page 4 of 27 (c) Details of perquisite referred to in the resolution was- Free use of furnished accommodation owned or leased by the company with amenities including Water, Gas, Electricity and Furnishings. If no accommodation is provided, the Managing Director is entitled to House Rent allowance subject to a ceiling of 70% of his salary. The expenditure incurred by the Company on Water, Gas, Electricity and Furnishings will be evaluated as per Income Tax Rules, 1962.

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Source: SecMarx — sebi:EAD-7/BD/NR/2019-20/7079-82. 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.