ORDER OF THE ADJUDICATING OFFICER UNDER SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995 AGAINST M/S BISIL PLAST LTD. FOR THE VIOLATION OF REGULATION 17(3) OF THE SEBI (CENTRAL LISTING AUTHORITY) REGULATIONS, 2003 READ WITH CLAUSE 51 OF THE LISTING AGREEMENT IN THE MATTER OF FILING OF INFORMATION ON THE EDIFAR WEBSITE
I was appointed as Adjudicating Officer by SEBI vide order dated May 18, 2004 to inquire into and adjudge the alleged non compliance with the requirements of Regulation 17(3){erstwhile Regulation 18(3)} of the SEBI (Central Listing Authority) Regulations, 2003 read with Clause 51 of the Listing Agreement by Bisil Plast Ltd. (hereinafter referred to as the company).
Accordingly, a Show Cause Notice dated July 20, 2004 for the aforesaid alleged violations was issued to the company. Vide its letter dated August 6, 2004, the company replied to the Show Cause Notice submitting interalia that it is regular in sending to the Stock Exchange/s Financial Statements comprising Balance Sheet, Profit and Loss Account, Cash Flow Statement and Quarterly Financial Results in time under various clauses of the Listing Agreement.
An opportunity of personal hearing was granted to the company in terms of provisions of sub-rule (3) of Rule 4 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 vide reference no. ADJ.PRD/SKS/23076/2004 dated October 11, 2004. The company represented by Shri Sanjay Shah, Managing Director and Shri K.R. Mehta, Director appeared at the personal hearing and made some submissions.
NOTICE AND REPLY
The show cause notice dated July 20, 2004 alleges that the company failed to upload the following information on the EDIFAR website:
1. To upload the un-audited quarterly financial statements for the quarter ended December 2002 and quarter ended March 2003.
2. To upload the share-holding pattern statement for the quarter ended December 2002 and quarter ended March 2003.
3. To upload the Annual Report, inclusive of the Corporate Governance Report, balance sheet, profit and loss account and the cash flow statement.
Therefore, it was alleged that the company has failed to comply with the requirements of Regulation 17(3) of the SEBI (Central Listing Authority) Regulations, 2003 read with Clause 51 of the Listing Agreement and this is liable for penalty under Section 15A of the SEBI Act, 1992.
Vide its letter dated August 6, 2004, the company replied to the Show Cause Notice submitting interalia as follows:-
1. The company is regular in sending to the Stock Exchange/s Financial Statements comprising Balance Sheet, Profit & Loss Account, Cash Flow Statement and Quarterly Financial Results in time under various clauses of the Listing Agreement.
2. The company is regular in sending Quarterly Corporate Governance Progress Report and Annual Corporate Governance Report to the Stock Exchange/s.
3. The company is also regular in sending Quarterly Shareholding Pattern to the Stock Exchange/s.
The company informed that it is in the process of strengthening its communication facilities so that all the above information can also be uploaded in the EDIFAR website as per Clause 51 of the Listing Agreement. The company requested for some time to comply and also requested to withdraw the adjudication proceedings.
SUBMISSIONS OF THE COMPANY AT THE PERSONAL HEARING
The company represented by Shri Sanjay Shah, Managing Director and Shri K.R. Mehta, Director appeared at the personal hearing granted to it by SEBI on October 27, 2004. At the hearing the company interalia made the following submissions:
1. The company has submitted all the information in physical form under other clauses of the Listing Agreement which are required to be filed in electronic form under clause 51 of the Listing Agreement. Thus, the company has kept the spirit of the Listing Agreement. The default is only non-submission in electronic form.
2. On telephonic enquiry with Mr. Umeshbhai, Department of Corporate Services, Bombay Stock Exchange on October 27, 2004, the company was informed that its application dated October 2, 2004 for EDIFAR registration has been forwarded by them to NIC and the company has been registered at NIC for EDIFAR. The company is awaiting login password from NIC in a weeks' time.
3. There were no inquiry proceedings/penal action initiated against the company for non-compliance of Listing Agreement by any stock exchange/SEBI since the shares of the company were listed on the stock exchanges.
4. The company requested to condone their irregularity.
Subsequent to the personal hearing, vide its letter dated November 9, 2004, the company has interalia informed that NIC has registered the company in EDIFAR and the company has been allotted User ID and PIN.
APPRECIATION OF EVIDENCE AND FINDINGS
Regulation 17(3) of SEBI (Central Listing Authority) Regulations, 2003 reads as under :
“If a company or other body corporate, mutual fund or collective investment scheme fails to comply with these regulations, the listing conditions or the listing agreement or neglects to furnish any information or documents, which are required to be furnished to the Board, to the Authority or to an exchange as per these Regulations, the listing conditions or the listing agreement, it shall be liable to penalty as specified in Section 15A of the Act, to be imposed in accordance with the procedure prescribed under Chapter VI A of the Act."
Section 15A of SEBI Act, 1992 reads as under:
If any person, who is required under this Act or any Rules or Regulations made thereunder,-
(a) to furnish any document, return or report to the Board, fails to furnish the same, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less,
(b) to file any return or furnish any information, books or other documents within the time specified therefor in the regulations, fails to file return or furnish the same within the time specified therefor in the regulations, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less,
(c) to maintain books of accounts or records, fails to maintain the same, he shall be liable to [a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less."
Taking into consideration the submissions of the company that it had regularly filed the required documents in physical form with the stock exchanges and had also applied for registration in EDIFAR and its subsequent communication that it has got registered in EDIFAR , the non compliance of Regulation 17(3) of the SEBI (Central Listing Authority) Regulations, 2003 read with Clause 51 of the Listing Agreement Regulation requiring the company to upload the information on the EDIFAR website may not be viewed seriously.
Under the aforesaid circumstances, it would not be just and fair to impose a penalty as the company had sincerely made efforts to comply with the Regulations. It, therefore, cannot be said that the company did not act in good faith or acted negligently.
ORDER
Having regard to the factors contained in Section 15J of SEBI Act, 1992, facts and circumstances of the case and the submissions made, I am of the considered view that no penalty under Section 15A of SEBI Act, 1992, can be levied in this case for non-compliance of Regulation 17(3) of the SEBI (Central Listing Authority) Regulations, 2003 read with Clause 51 of the Listing Agreement.
| Date: December 01, 2004 |
Santosh Kumar Sharma |
| Place: Mumbai |
Adjudicating Officer |