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Sebi slaps over INR 1 crore fine to Suzlon Energy

Power News - Published on Wed, 25 Apr 2018

Image Source: moneycontrol.com
Economic Times reported that Sebi slapped a fine of more than INR 1 crore on wind turbine maker Suzlon Energy for violating listing agreement norms. A total fine of INR 1.1 crore, including INR 5 lakh on an official, has been imposed as the company failed to disclose price sensitive information as required under the listing regulations on more than one occasion.

Sebi's Adjudicating Officer Sahil Malik said in the order said that "I find that the investigation did not bring out the disproportionate gain or unfair advantages to the noticees and loss caused to investors as a result of non-disclosure of truncation of order. They failed to make the disclosure on more than one occasion, hence it can be said, it is repetitive in nature.”

The noticees in the case were Suzlon Energy, its promoters Tulsi R Tanti and Girish R Tanti, and Hemal A Kanuga.

According to the order, Mr Tulsi Tanti is Chairman and Managing Director,Mr Girish Tanti is an Executive Director and Kanuga, who has been fined INR 5 lakh, is compliance officer of the firm.

According to information available on BSE, Kanuga is currently company secretary.

The violations pertain to failure to make certain corporate announcements about orders received by the company. The regulator looked into announcements made during the period from April 1, 2006 to March 31, 2009.

Mr Malik said that "I note from the documents on record that the noticees were charged of non-disclosing the truncation/ non-fulfillment of orders on five occasions. The noticees admittedly stated that of the five announcements, specific announcements of the cancellation of two orders were made. In the other three cases, the company in its professional judgement felt that the identity of the client would not have mattered at all for price discovery and accordingly no specific disclosures in relation to these three cases were made.”

The clients in regard to whom the cancellation of orders were not disclosed were Reliance Energy, P R China and DLF Home Developers.

Sebi said that "All the three clients are big names in their own rights. Timely disclosure of the cancellation may have had an impact on the price of the scrip.”

The markets regulator also said that the noticees did not elucidate as to "why they considered orders cancelled/ truncated by Edison and Horizon are price sensitive and the orders truncated/ cancelled by Reliance Energy, P R China and DLF Home Developers are not price sensitive in nature".

Under the clause 36 of the Listing Agreement, a company is required to keep the stock exchange informed about any price sensitive information and Suzlon Energy "admittedly failed" to disclose the truncation of orders on three occasions, Sebi said.

Since the clause does not cast any specific liability on the managing director or the executive director of the company regarding disclosure, the regulator said Tulsi Tanti and Girish Tanti "have not violated" the same.

The order also noted that Suzlon Energy violated PIT (Prohibition of Insider Trading) Regulations, which directs a company to give price sensitive information to stock exchanges on a continuous and immediate basis.

With regard to Kanuga, Sebi said that being the compliance officer of Suzlon Energy, it was his duty to ensure that the company complies with all the legal obligations.

Source :

Posted By : Rabi Wangkhem on Wed, 25 Apr 2018
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