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Capital markets regulator Sebi has slapped a penalty of 5 lakh on Future Enterprises for not disclosing Singapore arbitration proceedings in case against Amazon.

The arbitration proceedings were related to the composite scheme of arrangement between Future Group and Reliance Industries.

Sebi said Future Group failed to disclose to the stock exchanges the various proceedings and orders that went in favour of Amazon and therefore has violated the regulations.

As per the relevant provisions, the initiation of the arbitration proceedings on 5 October, 2020 and also the passing of order dated 25 October, 2020 in favour of Amazon should have been disclosed to the stock exchanges as a material event, as soon as reasonably possible and not later than 24 hours, Sebi said in its order.

According to Sebi rules, every listed entity is required to make the disclosure of any event or information which, in the opinion of the board of directors of the listed company is material in nature. The disclosure would only be required if the eventor information is considered in the reasonable opinion of the listed company to be material in nature and if the said information is not available publicly.

Sebi further added that Future Group had only disclosed the initiation of arbitration proceedings and information with respect to interim relief granted to Amazon only on 1 November, 2020 i.e, with a delay of 26 days with respect to initiation of the arbitration proceedings and a delay of 6 days with respect to passing of order by Singapore abritration council.

Sebi has also noted that the said disclosure was done by the Future Group only after active intervention of the stock exchanges.

The conduct of Future Enterprises is in violation of provisions of Listing Obligations and Disclosure Requirements Regulations, Sebi's circular and Prohibition of Insider Trading norms.

Consequently, the markets regulator has levied fine of 5 lakh on Future Enterprises, which needs to be paid within 45 days.

 

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