ORDER OF THE ADJUDICATING OFFICER UNDER SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995 AGAINST M/S BITS 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 BITS 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. No reply was received from the company to the said Show Cause Notice. Another Show Cause Notice dated September 24, 2004 was sent to the company at the address subsequently received from the Stock Exchange, Mumbai- the Regional Stock Exchange of the company. No reply was received to the said Show Cause Notice from the company.
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/23079/2004 dated October 11, 2004. Vide its letter dated October 19, 2004, the company interalia informed that they had been following up on EDIFAR registration since May 2004 and their registration under EDIFAR system has already been made effective on October 18, 2004. The company informed that they are in the process of uploading the various statements/documents on the EDIFAR website. The company requested to condone the delay in the matter and relieve them of the personal attendance in the enquiry proceedings.
NOTICE AND REPLY
The show cause notices dated July 20, 2004 and September 24, 2004 allege 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.
No reply was received from the company to the said Show Cause Notices. However, in response to our letter reference no. ADJ.PRD/SKS/23079/2004 dated October 11, 2004 regarding the personal hearing granted to the company, vide its letter dated October 19, 2004, the company interalia informed that they had been following up on EDIFAR registration since May 2004 and their registration under EDIFAR system has already been made effective on October 18, 2004. The company informed that they are in the process of uploading the various statements/documents on the EDIFAR website. The company requested to condone the delay in the matter and relieve them of the personal attendance in the enquiry proceedings.
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 been following up on EDIFAR registration since May 2004 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 |