sebi:SO/VV/AA/2020-21/4164
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Facts / Headnote
Disposed of in terms of Section 15JB of the SEBI Act, 1992 and Section 23JA of the SCRA read with regulation 23(1) of the Settlement Regulations on the basis of settlement terms
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 23J
- s. 23
- s. 23H
Regulations
- Reg. 25
- Reg. 28
- Reg. 23(1)
- Reg. 3(1)
- Reg. 4(2)(f)
- Reg. 23(2)
- Reg. 23(4)
- Reg. 17(8)
- Reg. 33(2)(a)
- Reg. 34(3)
Parties
- Shri Dilip Shanghvi
Holding
The adjudication proceedings initiated against the Applicant vide SCN dated May 19, 2020 are disposed of in terms of Section 15JB of the SEBI Act, 1992 and Section 23JA of the SCRA read with regulation 23(1) of the Settlement Regulations on the basis of the settlement terms.
Full text
Page 2 of 4 (i) Prior approval of the audit committee for transactions with AML, as required under regulation 23(2) of SEBI (LODR) Regulations, 2015, was not obtained. (ii) Considering that the transactions with AML would have qualified as material related party transactions, it required approval of shareholders under regulation 23(4) of SEBI (LODR) Regulations, 2015, which was not obtained. (iii) Disclosure of related party transactions with AML in the Annual Reports for FY 2015-16 and FY 2016-17, as required under regulation 34(3) read with schedule V of SEBI (LODR) Regulations, 2015, was not made. (iv) The above resulted in violation of regulation 23(2), 23(4) and 34(3) of SEBI (LODR) Regulations, 2015 by SPIL. Since a company acts through its board of directors and the directors are responsible for all the acts of omission and commission by the company. In view of the same, Shri Dilip Shanghvi (hereinafter referred to as the ‘Applicant’), being Managing director of SPIL, was in-charge of its operations and decision making process, therefore, it was observed that the Applicant had violated the provisions of regulations 4(2)(f), 23(2) and 23(4) of SEBI (LODR) Regulations, 2015. (v) Since the material fact that AML was a related party was omitted in the financial statements, the compliance certificate provided by the Applicant as required under regulation 33(2)(a) and regulation 17(8) read with Part B of Schedule II of SEBI (LODR) Regulations, 2015, was untrue, resulting in
Page 3 of 4 Imposing Penalties) Rules, 1995 (hereinafter referred to as ‘SEBI Adjudication Rules’) and under Section 23-I of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as ‘SCRA’) read with rule 3 of Securities Contracts (Regulations) (Procedure for Holding Inquiry and Imposing Penalties) Rules, 2005 (hereinafter referred to as ‘SCR Adjudication Rules’), to inquire into and adjudge under Section 15HB of the SEBI Act, 1992 and Section 23H of SCRA for the aforesaid alleged violations committed by the Applicant.
Page 4 of 4 the Applicant vide email dated January 13, 2021. Accordingly, the settlement amount has been remitted on behalf of the Applicant through RTGS on January 15, 2021. The said information has been communicated by the Applicant to SEBI vide email dated January 15, 2021. The concerned department of SEBI vide their email dated January 19, 2021 has confirmed the receipt of the settlement amount.
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Source: SecMarx — sebi:SO/VV/AA/2020-21/4164. 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.