[The following guest post is contributed by Supreme Waskar, who is a corporate lawyer] By an order passed earlier this month, an adjudicating officer of SEBI imposed a fine of Rs. 2 crores on New Delhi Television Ltd. (“NDTV”) for failure to promptly disclose material information to stock exchanges under clause 36 of the listing agreement. Facts of the case On February 21, 2014, NDTV had received...
SAT Order in the DLF Case: Controlling SEBI’s Punitive Vehemence
[In an earlier post, I had offered some initial overview and commentary on the SAT Order in the DLF IPO Case. In the following post, Vinod Kothari offers another perspective that focus on certain specific aspects of the order and analyzes their impact on SEBI’s role as an enforcer of securities regulation. The author can be contacted at [email protected].] The order of the Securities...
SAT Order in the DLF IPO Case
As readers may recall, the adequacy of disclosures in the IPO prospectus pertaining to DLF Limited was called into question in a series of investigations by the Securities and Exchange Board of India (SEBI). The process culminated in SEBI passing an order on October 10, 2014 finding that the disclosures were inadequate and thereby restraining DLF, its directors and CFO from buying or selling...
SEBI Reforms – Part 3: From Listing Agreement to Listing Regulations
In most jurisdictions, several aspects of corporate governance and disclosures for listed companies are regulated through stock exchange listing requirements. These apply only to listed companies, and they are enforced by the stock exchanges. Operating as conditions to continuous listing, one of the enforcement mechanisms used is the threat (sometimes carried out) of delisting the securities...
Disclosure of “Encumbrances” on Shares
Recently, the Securities Appellate Tribunal (SAT) had to deal with two separate situations pertaining to the disclosure of pledge or other encumbrance over shares. In an order discussed earlier today, the SAT found that the acquisition of shares by a public financial institution through the invocation of a pledge was required to be disclosed in accordance with SEBI’s Takeover Regulations...
Penalty for Late Disclosure of Shareholding
Last week, an adjudicating officer of SEBI issued an order imposing an aggregate penalty of Rs. 50 lakhs (Rs. 5 million) on certain promoter entities of Hindustan Unilever Limited (HUL) for delayed filing of disclosures regarding the shareholding of such entities under the SEBI takeover regulations. It came to SEBI’s notice that there were delayed filings of shareholding disclosures for certain...
Monitoring Secondary Market Disclosures
One of the concerns regarding the corporate disclosure regime is that while the primary market disclosure requirements (e.g. for a prospectus) are extensive and stringent, the secondary market disclosures by companies that are already listed on the stock exchanges are far from being elaborate. In order to bridge this gap, SEBI has been taking steps to enhance the disclosure requirements in the...
Further Order by SEBI on Shareholding Disclosures
(The following post is contributed by Yogesh Chande, an advocate practising in Mumbai) SEBI’s whole time member in an order dated 26 March 2012 (Order), has revoked the directions which were issued by an interim order dated 8 March 2010 (which has been discussed earlier) against the entities mentioned in paragraph 4 of the Order. One of the issues which required to be examined...
SAT on Disclosures Regarding “Promoters”
The Securities Appellate Tribunal (SAT) has issued its decision overturning an order of SEBI’s adjudicating officer that had found Enam Securities to have violated securities laws in connection with the IPO of Yes Bank. One of the key issues in contention was whether Rabobank ought to have been disclosed as a “promoter” of Yes Bank. On facts, while the application to the Reserve Bank of India...
Supplemental Shareholding Disclosure Norms
In its board meeting held on August 4, 2010, SEBI introduced three changes to its norms requiring disclosure of shareholding patterns of listed companies. 1. Listing: The first change relates to companies undertaking an IPO. The current regime requires disclosure of shareholding pattern in the offer document and thereafter (after listing) on a quarterly basis with the stock exchanges under the...
Recent Comments