ORDER OF THE ADJUDICATING OFFICER UNDER SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995 AGAINST M/S BOMBAY BARODA ROADWAYS (INDIA) 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 Bombay Baroda Roadways (India) 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 19, 2004, the company forwarded hard copies of the following documents in response to the aforesaid Show Cause Notice:-
- The un-audited quarterly financial statements for the quarter ended December 2002 and quarter ended March 2003.
- The share-holding pattern statement for the quarter ended December 2002 and quarter ended March 2003.
- The Annual Report, inclusive of the Corporate Governance Report, balance sheet, profit and loss account and the cash flow statement for the year ended March 2003.
However, the company did not submit any explanation on the violation of Regulation 17(3) of the SEBI (Central Listing Authority) Regulations, 2003 read with Clause 51 of the Listing Agreement regarding uploading the required information on the EDIFAR website.
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/23075/2004 dated October 11, 2004. The company failed to appear at the said personal hearing.
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.
The company replied to the said Show Cause Notice vide its letter dated August 19, 2004 enclosing hard copies of certain financial documents such as unaudited quarterly financial statements, Annual Report etc. as already stated in the preceding paragraphs. However, the company did not submit any explanation on the violation of Regulation 17(3) of the SEBI (Central Listing Authority) Regulations, 2003 read with Clause 51 of the Listing Agreement regarding uploading the required information on the EDIFAR website.
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."
The information as specified in Clause 51 of the Listing Agreement is of immense importance as it would help the investors to have information on the company and its management and also to have information on the functioning of the company. The company was required to upload the information on the EDIFAR website from the quarter ended December 2002. The company has failed to upload the required information on the EDIFAR website. Further, it has not submitted any explanation on the violation of Regulation 17(3) of the SEBI (Central Listing Authority) Regulations, 2003 read with Clause 51 of the Listing Agreement regarding uploading the required information on the EDIFAR website.The company also did not avail of the opportunity of personal hearing granted to it by SEBI as already stated in the preceding paragraphs.
From the facts as stated above, it is established that there has been non-compliance of the requirements of Regulation 17(3) of the SEBI (Central Listing Authority) Regulations, 2003 read with Clause 51 of the Listing Agreement with respect to uploading of information on EDIFAR website and the same is liable to be penalised.
In respect of the said contravention, Regulation 17(3) of the SEBI (Central Listing Authority) Regulations, 2003 prescribes penalty under sub section (b) of Section 15A of SEBI Act,1992 .
CONCLUSION
In order to adjudge the quantum of penalty, I have to consider the following factors as per section 15J of the SEBI Act, 1992:
a) the amount of disproportionate gain or unfair advantage, wherever quantifiable,made as a result of the default,
b) the amount of loss caused to an investor or group of investors as a result of the default and
c) the repetitive nature of the default.
As regards the disproportionate gain or unfair advantage, there are no quantifiable figures available with respect to the default observed on the part of the company. There are also no figures or data to quantify the amount of loss caused to an investor or group of investors as a result of the default.
ORDER
As such, I hereby impose a penalty of Rs.1,00,000/- (Rupees one lakh only) on the company. Hence the penalty amount of Rs.1,00,000/- which shall be paid by the company by way of Demand Draft in favour of “SEBI – Penalties Remittable to Government of India”, payable at Mumbai and the same shall be sent to Ms. Neelam Bharadwaj, Deputy General Manager, Securities and Exchange Board of India Mittal Court, ‘B’ Wing, 1st Floor, 224, Nariman Point, Mumbai – 400 021 within 45 days of receipt of this order.
| Date: December 01, 2004 |
Santosh Kumar Sharma |
| Place: Mumbai |
Adjudicating Officer |