sebi:SO/SM/AU/2020-21/6354
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Facts / Headnote
settled
Regulations
- Reg. 25
- Reg. 28
- Reg. 2
- Reg. 23
- Reg. 103(2)
Parties
- NIIT Technologies Ltd (now known as Coforge Ltd.)
Holding
This settlement order disposes of the adjudication proceedings initiated against NIIT Technologies Ltd (now Coforge Ltd.) vide SCN dated August 06, 2020 on payment of Rs. 19,12,500 without admitting or denying any violation.
Full text
Page 2 of 5 a) On March 23, 2015, NIIT made an announcement on the Stock exchanges (BSE and NSE) that a dispute has arisen between one of its subsidiaries and one of its clients, which may result in claims and counter claims and that the company has provisioned USD 10 million for the same. Further, it is noted from the annual report of NIIT for FY 2014-15 that the above mentioned dispute had a total impact of Rs. 80 crores, which in turn is 3.37% of the consolidated revenue of the company (Rs. 2,372.5 crore) for the F.Y. 2014-15. b) In this context, the submissions made by NIIT were perused and it is alleged that NIIT was aware of the situation regarding the dispute since December 22, 2014, when a law firm advised NIIT and its subsidiary to resolve the dispute through dispute resolution process. It was also observed that an amount equivalent to the aforesaid disputed amount viz. USD 10 million was approved in the Board meeting of the company held on January 14, 2015. Further, it is seen that the company’s subsidiary received a default notice from its client on March 13, 2015, which was immediately informed to the company. However, it is alleged that the company made the corporate announcement regarding the dispute in the context of receiving default notice only on March 23, 2015. c) In this regard, it is observed that on the subsequent day of making the aforementioned corporate disclosure viz. March 24, 2015, the scrip price of NIIT opened at Rs. 367.1 on BSE and touched a lo
Page 3 of 5 of NIIT which makes it a price sensitive information, the company was required to make disclosures to the stock exchange immediately on receiving the default notice from its client i.e. on March 13, 2015. However, NIIT is alleged to have informed the stock exchanges about the same only on March 23, 2015 i.e with a delay of 10 days. Therefore, it was alleged that NIIT has violated Clause 36 of the equity listing agreement read with regulation 103(2) of the LODR Regulations.
Page 4 of 5 applicant may be settled on payment of Rs. 19,12,500/- (Rupees Nineteen Lakh Twelve Thousand and Five Hundred Only) towards the settlement terms. The Panel of Whole Time Members of SEBI approved the said recommendation of HPAC on January 11, 2021 and the same was communicated to the applicant vide email dated January 13, 2021.
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Source: SecMarx — sebi:SO/SM/AU/2020-21/6354. 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.