IN THE OFFICE OF THE ADJUDICATING OFFICER,

SECURITIES & EXCHANGE BOARD OF INDIA, 3rd FLOOR

L & T CHAMBERS

16, CAMAC STREET 

KOLKATA – 700 017

ORDER IN ORIGINAL IN THE MATTER OF FILING OF DOCUMENTS ON THE ELECTRONIC DATA INFORMATION FILING AND RETRIEVAL (EDIFAR) WEBSITE UNDER CLAUSE 51 OF THE LISTING AGREEMENT BY LCC INFOTECH LTD.

N.B. i) This copy is granted free of cost for the use of the person to whom it is issued.

Name and address of the party  :  LCC Infotech Ltd.

 of P-16, C.I.T. Road,

Kolkata - 700014

Show cause Notice(s) : One

Number and Date : SEBI/ERO/JJ/2004/7788

 July 9, 2004

Notice for Hearing :  One

Number and Date : SEBI/ERO/BM/2004/7868

 July 27, 2004

Nature of Contravention :  Alleged non-compliance of

Clause 51 of the Listing Agreement  read with Regulation 17(3) {erstwhile Regulation 18(3) of the SEBI (Central Listing Authority) Regulation, 2003} in the matter of filing of information on the EDIFAR website.

Present during the hearing : A.K. Labh

held on August 17, 2004 at SEBI’s Authorised Representative

Kolkata Office  

1.0 ORDER OF APPOINTMENT:

1.1 The undersigned has been appointed as an Adjudicating Officer by Securities and Exchange Board of India in terms of an Order dated June 30, 2004, to conduct an enquiry into alleged non compliance with the requirements of Clause 51 of the Listing Agreement read with Regulation 17(3) {erstwhile Regulation 18(3)} of the SEBI (Central Listing Authority) Regulations, 2003 by M/s LCC Infotech Ltd.

2. SHOW CAUSE NOTICE & HEARING:

2.1 On appointment as Adjudicating Officer, as per the procedure laid down in SEBI (Procedure for holding inquiry and imposing penalty by Adjudicating Officer) Rules, 1995 (hereinafter referred to as the "SEBI Rules") a notice dated July 9, 2004 in accordance with Rule 4 of SEBI Rules, was served on M/s LCC Infotech Ltd. calling upon it to show cause within 15 days as to why an enquiry should not be held against them for the alleged violations mentioned in the Order.

2.2 The company was also called upon to explain by giving a written reply including evidence, if any, within 15 days from the date of service of the notice as to why an inquiry should not be held against them for imposing penalty in accordance with Section 15 A(b) of Securities and Exchange Board of India Act 1992 read with the said Regulations and also the said Rules. The company submitted its reply vide letter dated July 26, 2004.

2.3 The company was also given an opportunity for personal hearing to provide adequate opportunity to present the views in the matter. Accordingly, an opportunity of personal hearing was granted in terms of provisions of sub-rule(3) of Rule 4 of the said Rules to the company vide letter No.SEBI/ERO/BM/2004/7868 dated July 27, 2004. The company was advised to be present before the Adjudicating Officer at SEBI, Eastern Regional Office, L& T Chambers 3^rd Floor 16 Camac Street, Kolkata – 700017 on August 17, 2004.

2.4 Shri A.K. Labh, Authorized Representative appeared for the personal hearing on behalf of the company. During the personal hearing, Shri Labh made submissions in addition to the written reply to the show cause notice. 

3. SUBMISSION OF THE COMPANY

3.1              Shri Labh has stated that the company received a letter dated October 7, 2002 from the National Stock Exchange regarding applicability of EDIFAR. He has submitted that the company applied for EDIFAR registration on October 19, 2002. He has stated that the User ID and Password was intimated to the company by Technical Director, NIC on October 30, 2002 by e-mail and the company started filing reports under EDIFAR thereafter.

3.2               Shri Labh has submitted during the hearing that the company has complied with the EDFAR requirement at par, however, due to introduction of the concept for the first time, there might be few delays in the initial period due to lack of understanding of the subject. Shri Labh has further submitted that once it was streamlined, the company filed all the documents promptly thereafter.

3.3              Shri Labh has submitted that the company in course of time has lost most of its technically & legally experienced employees due to which problems crept in course of time to comply with certain formalities.

3.4              Shri Labh has apologised for minor delays in filing of the documents under EDIFAR.

4. FINDINGS:

4.1              I have carefully considered the reply filed by the company and also from the submissions made by them during the personal hearing. It is observed that the company received a letter dated October 7, 2002 from the National Stock Exchange regarding applicability of EDIFAR. The company has stated that it applied for EDIFAR registration on October 19, 2002 and that the User ID and Password was intimated to the company by Technical Director, NIC on October 30, 2002 by e-mail. The company has also stated that it started filing reports under EDIFAR thereafter.

4.2  Under clause 51 of the Listing Agreement the company was required to upload the the following financial statements/documents with effect from quarter ended September 2002 in the EDIFAR website.

·         Financial Statements comprising of Balance Sheet, Profit and Loss Account and full version of annual report, half yearly financial statements including cash flow statements and quarterly financial statements

·         Corporate Governance report

·         Shareholding pattern statement

·         Action taken against the company by any regulatory agency

4.3 Although the company has contended that it started uploading information on EDIFAR site after being intimated of the e-mail about the User ID and Password by NIC on October 30, 2002, it is observed from our records that the company was issued a show cause notice dated July 4, 2003 for failing to comply with the requirements of Clause 51 of the Listing Agreement. The company has also apologized for “minor delays” in filing of the documents with EDIFAR.

4.4   On going through the EDIFAR website it is found that the company’s name appears in the EDIFAR website and the information has been uploaded.

4.5   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 issued show cause notice on July 4, 2003 for non-compliance of clause 51 of the Listing Agreement i.e. EDIFAR. There was delay in filing of the documents under EDIFAR which the company has also accepted.

5. CONCLUSION

  From the facts as stated above it is found that there has been non-compliance of Clause 51 of the Listing Agreement with respect to uploading of information on EDIFAR website.

6. ORDER

6.1 In respect of the said contravention Regulation 18(3) of the CLA Regulation prescribes penalty under sub section (b) of Section 15A of SEBI Act .

While imposing penalty I have considered the contentions of the company that the violation was mainly due to lack of understanding of the subject/concept which was introduced for the first time. I have considered the submission of the company that in course of time it has lost most of its technically & legally experienced employees due to which problems creep in course of time to comply with certain formalities.  I have considered the submission of the company that there were minor delays in filing of the documents under EDIFAR and that too in the initial beginning. I have also considered that although the company has contended that it started uploading information on EDIFAR site after being intimated of the e-mail about the User ID and Password by NIC on October 30, 2002, but the company was issued a show cause notice dated July 4, 2003 vide which it was advised to show cause as to why the Adjudication Proceedings should not be initiated against the company for failing to comply with the requirements of Clause 51 of the Listing Agreement. I have also observed that the company has accepted “minor” delay in filing of documents under EDIFAR. I have also considered the fact that the company has now uploaded information on the EDIFAR Website though there has been some delay in uploading information. I have considered all the factors as specified in section 15(J) of the SEBI Act while adjudging quantum of penalty. Considering the facts and circumstances of the case and taking into account the contentions of the company, I consider that:

- a penalty of Rs.15,000/- (Rupees Fifteen Thousand) only be imposed in the company.

6.2 As such I hereby impose a penalty of Rs.15,000/- (Rupees Fifteen Thousand) only on the company. Hence the penalty amount of Rs.15,000/- which shall be paid by the company by way of Demand Draft in favour of “SEBI – Penalties Remittable to Government of India”, Mumbai may be forwarded to Ms. Neelam Bharadwaj, Deputy General Manager, Securities and Exchange Board of India Mittal Court, ‘B’ Wing, 1^st Floor, 224, Nariman Point, Mumbai – 400 021 within 45 days of receipt of this order.