2023 (9) TMI 575

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....dvocates i/b K. Ashar & Co. PER: JUSTICE TARUN AGARWALA, PRESIDING OFFICER 1. All these appeals are against a common order dated September 14, 2022 passed by the Adjudicating Officer ("AO" for convenience) of the Securities and Exchange Board of India ("SEBI" for convenience) imposing penalties under Section 23E of Securities Contracts Regulation Act, 1956 ("SCRA" for convenience) and Section 15HB of the SEBI Act, 1992 for violation of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations" for convenience). 2. The facts leading to the filing of the present appeal is, that the Practicing Company Secretary M/s. P. Sriram & Associates of the Company M/s Securekloud Technologies Limited observe....

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....he learned counsel, Shri Anubhav Ghosh, the learned counsel for the appellants and Shri Pradeep Sancheti, the learned senior counsel for the respondent. 6. Regulation 23(2) of the LODR Regulation provides as under:- "All related party transactions shall require prior approval of the audit committee." 7. A perusal of the aforesaid provision indicates that related party transactions requires prior approval of the audit committee. In the instant case, there is a specific finding that certain related party transactions were not placed before the audit committee. The Company in its reply has admitted that it had inadvertently missed to take prior approval of certain related party transactions from the audit committee. In view of this ad....

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....ependent directors were appointed no such relative of the independent directors were employed and, consequently, there was no breach of Regulation 16(1)(b)(vi) of the LODR Regulations. However, we find that during their tenure as independent directors one son of one independent director and husband of another independent director were appointed in the subsidiary of the Company. Such appointment of an immediate relative of the independent director was violative of Regulation 16(1)(b)(vi) and there was also a conflict of interest. The said provision disqualifies any person whose relative is an employee of a listed entity or its holding, subsidiary or associate company. Independence of an independent director is a continuing requirement for co....

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.... vs. SEBI Appeal No. 201 of 2018 decided on May 3, 2021 this Tribunal has held that Section 23E of the SCRA is not the charging provision for imposition of penalty for violation of the Listing Agreement and that the correct provision is Section 23A(a) of the SCRA. 13. In view of the aforesaid, we find that penalty under Section 23A is from a minimum of Rs. 1 lakh to a maximum of Rs. 1 crore and under Section 23E of the SCRA a penalty is up to a maximum of Rs. 25 crores. 14. Considering the aforesaid and the violations committed by the Company, we are of the opinion, that the imposition of penalty amounting to Rs. 25 lakhs is excessive and arbitrary in the facts and circumstances of the given case. This Tribunal by an interim order dat....