sebi:Order/BM/GN/2023-24/30073

SEBI · SEBI · 2022-09-29 · Barnali Mukherjee, Adjudicating Officer

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Facts / Headnote

Penalty imposed on Noticee for violation of Regulation 23(4) of SEBI (LODR) Regulations, 2015

Provisions invoked

• s. 15
• s. 15H
• s. 15J
• s. 28A
• s. 31

Regulations

• Reg. 15
• Reg. 23(4)
• Reg. 23

Parties

• Niraj Cement Structurals Limited

Holding

The Noticee, Niraj Cement Structurals Limited, violated Regulation 23(4) of the SEBI (LODR) Regulations, 2015 by failing to obtain prior shareholder approval for material related party transactions that exceeded the approved monetary limits with Niraj Patel JV, Niraj Babulnath JV, and Niraj Jandu JV during FY 2022-23. A penalty of ₹4,00,000 was imposed under Section 15HB of the SEBI Act, 1992.

Full text

Adjudication Order in the matter of Niraj Cement Structurals Limited Page 2 of 10 4. On the basis of submissions made by the Noticee, it was observed that the material RPTs carried out by the Noticee with Niraj Patel JV, Niraj Babulnath JV and Niraj Jandu JV during the Financial Year 2022-23 exceeded the monetary limit approved by the shareholders of the Company. However, the Noticee allegedly failed to obtain the prior approval of the shareholders as required under regulation 23(4) of LODR regulations, for the transactions in excess to previous approval granted vide resolution dated September 29, 2022.

Adjudication Order in the matter of Niraj Cement Structurals Limited Page 3 of 10 d) Noticee submitted that these transactions were undertaken in good faith and all such transactions are in the ordinary course of business and at Arm's Length basis. Importantly, these actions were motivated by the best interests of the company and were not intended to have any adverse effects on the investors and stakeholders. e) Noticee submitted that the failure to obtain prior shareholder approval, notably in the last quarter of the Financial Year 2022-23, was a direct consequence of Mr. Anil Anant Jha’s ongoing medical condition, leading to an unintended lapse.

Adjudication Order in the matter of Niraj Cement Structurals Limited Page 4 of 10 March 2023 and the transactions exceeded the approved limit and there was inadvertent lapse on the part of the Noticee to seek prior approval of shareholders of the Noticee for the subsequent modification of the material Related Party Transactions in few of there joint venture partners, namely Niraj Patel JV, Niraj Babulnath JV and Niraj Jandu JV which are summarized as below: Sr. No. Name of the Party Limit approved by the shareholders of the Company Date of Approval Amount of Transaction Amount of which fail to obtain prior approval Fresh limit approved on 26th Sept., 2023 1 Niraj Patel JV 55 Crore 29-09- 2022 56.91 Crore 1.91 Crore 200 Crores 2 Niraj Babulnath JV 40 Crore 29-09- 2022 57.12 Crore 17.12 Crore 200 Crores 3 Niraj Jandu JV 40 Crore 29-09- 2022 135.69 Crore 95.69 Crore 200 Crores

Source: SecMarx — sebi:Order/BM/GN/2023-24/30073. 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.