Tribunal upholds penalty for securities violations by listed company, rejects appeal for waiver.

The Tribunal upheld the penalty imposed by Bombay Stock Exchange Ltd. on a public listed company for violations of Securities and Exchange Board of India regulations. The appellant's appeal seeking waiver or reduction of penalties for non-compliance with Listing Regulations was rejected due to lack of valid reasons or exceptional circumstances justifying the violations. The Tribunal found the appellant failed to provide sufficient justification for the non-appointments of a Company Secretary and independent directors, leading to the dismissal of the appeal and affirmation of the penalty.

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Issues:
Violation of various provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 leading to imposition of penalties.

Analysis:
The appeal was filed against the order of Bombay Stock Exchange Ltd. imposing a penalty of Rs. 20,40,000 for non-compliance with Listing Regulations. The appellant, a public listed company with over 6800 shareholders, failed to comply with several provisions. SEBI's circular dated May 3, 2018, provided a streamlined process for penalty imposition, allowing stock exchanges flexibility to deviate under exceptional circumstances with written reasons. Exceptional events for penalty waiver included natural calamities, regulatory seizures, non-approved compliances, court/regulator directions, and accidental damage.

The appellant violated various regulations, with penalties ranging from Rs. 1000 to Rs. 460,000. While some violations were rectified, others persisted. The appellant sought penalty waiver citing exceptional circumstances for not appointing a Company Secretary and two independent directors. However, the representation was rejected, and the penalty upheld. The appellant's argument for penalty reduction based on unforeseen events was dismissed as the exceptions in the circular did not apply, and no justification was provided for the non-appointments.

The Tribunal found the appellant in violation of Listing Regulations and rejected the appeal. It concluded that no merit existed in reducing the penalty due to the absence of valid reasons for non-compliance with the regulations. The appeal was dismissed based on the lack of justification for penalty reduction.

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