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2020 (3) TMI 1283 - AT - SEBIViolation of Listing Agreement read with Section 21 of the Securities Contracts (Regulation) Act - penalty of ₹ 30 lakh has been imposed on the appellants - HELD THAT:- There is no allegation that the results are not disclosed. Hence the alleged violation is in terms of only some variations which are about 10% of the reported net profits for the financial year 2010- 11. The explanation furnished by the appellants is in terms of mistakes committed in terms of minor heads /sub-heads. Given that, there is no allegation of non reporting and, therefore, the appellants had complied with the mandatory requirement of Clause 41 we give benefit of doubt to the appellants in terms of the explanation provided and do not intend to impose any penalty on this ground. We do not agree with the contention of the appellants as regards inordinate delay in the proceedings since we note that the appellants are also partly responsible for the delay in completing the investigation by not providing all the details / information sought by SEBI from October 2012 till July 2015. As explained in the aforesaid paragraphs, the contention of the appellants that substantive compliance of Clause 36 of the Listing Agreement has been made cannot be accepted since important / material information relating to transferee entity (IKAB), a related party, its affiliation to the appellants as a group entity, the detailed consideration of the transactions, etc. were either not disclosed or disclosed after considerable time. Therefore, the finding in the impugned order that the appellants have violated the true spirit of Clause 36 cannot be faulted. Similarly, the submission that Clause 50 is not violated because SEBI has no mandate on the accounting standards has no merit. A reading of Clause 50 makes it clear that the stated accounting standards have to be mandatorily followed by a listed entity. Accordingly, we uphold the finding in the impugned order that the appellants have violated Clause 36 and Clause 50, alongwith the stated accounting standards. While upholding the impugned order partially, we are also of the considered view that the penalty imposed on the appellants needs to be reduced. Therefore, some of the disclosures were made by the appellants and, therefore, it is a case of partial disclosure rather than non-disclosure; delay on the part of the respondent in completing the proceedings and the benefit of doubt given to the appellants on one of the alleged violations, we reduce the penalty imposed on the appellant No. 1 from ₹ 20 lacs to ₹ 10 lacs and on appellant Nos. 2 and 3 from ₹ 5 lacs each to ₹ 3 lacs each thereby reducing the total amount of penalty from ₹ 30 lacs to ₹ 16 lacs. The appellants are directed to pay the penalty amount within four weeks from the date of this order.
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