India’s biggest stock exchanges have penalized hundreds of companies for non-compliance with the listing and disclosure norms of the Securities and Exchange Board of India (Sebi).
The National Stock Exchange (NSE) said it has penalized about 250 companies for violating Sebi’s Listing Obligation and Disclosure Requirement Regulations (LODR) 2015. The violations include non-appointment of a woman director, compliance officer and share transfer agent and delay in intimation of board meeting.
These companies include Adani Ports and Special Economic Zone Ltd, Bharat Petroleum Corp. Ltd, Jet Airways (India) Ltd, Bharat Heavy Electricals Ltd, InterGlobe Aviation Ltd, IL&FS Engineering and Construction Co. Ltd and Indian Oil Corp. Ltd.
About 72 companies have been penalized for not complying with the market regulator’s rules on the composition of a board, including appointment of a woman director.
A total of 39 companies have been penalized for non-submission of the statement on shareholder complaints within the stipulated time frame, 19 for non-compliance with constitution of nomination and remuneration committee, 18 for non-compliance with the constitution of audit committee, 26 for non-submission of corporate governance compliance report within the prescribed period and 37 for non-submission of shareholding pattern within the prescribed period.
“The NSE after monitoring the compliance of listing regulations for all its listed entities imposed fines and issued notices to non-compliant companies for quarter ended 31 March 2019 as per above mentioned Sebi circular," NSE said in a statement on Wednesday.
As per Sebi rules, exchanges can levy per day fines and freeze the holdings of the promoter and promoter group if non-compliant listed entities fail to comply with the requirement of listing regulations and/or pay fine levied within the stipulated period.
If the non-compliance continues for two consecutive quarters, the stock exchange can shift the trading in securities of the companies to a specified category wherein trades shall take place on “Trade for Trade" basis and subsequently suspend the trading of companies.
Sebi had specified a standard operating procedure for levying fines for non-compliance with provisions of LODR 2015 in a 3 May 2018 circular.
Meanwhile, BSE has levied penalties against various companies for late or non-submission of filings and non-compliance with corporate governance requirements based on filings received by the exchange from companies for the March quarter.
It said 515 companies showed non-compliance in appointing a qualified company secretary as the compliance officer, 173 did not comply with board composition requirements, 122 did not fulfil nomination and remuneration committee composition, and 121 did not submit or submitted shareholding pattern late, while 124 did not submit the investor complaints report or submitted it late.