A listed Entity is required to comply with the relevant Regulations/directions issued by SEBI from time to time

A listed Entity is required to comply with the relevant Regulations/directions issued by SEBI from time to time

The Securities and Exchange Board of India (SEBI) had received a letter from Vistara ITCL (India) Ltd. (Vistara), a SEBI registered Debenture Trustee in which Vistara had provided a list of companies from which it had not received till that date the Half Yearly Communication (HYC) as per Regulation 52(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (LODR Regulations) for the half year ended March 31, 2019.

The aforesaid list of companies included Embassy Property Development Pvt. Ltd. (Noticee/Company). In view of the aforesaid information, SEBI conducted an examination and had observed prima facie violation of Regulation 52(1), 52(4) and 52(5) of LODR Regulations by the Noticee.

The Noticee in its reply had submitted that the Noticee was a sponsor to the REIT (Embassy Office Parks REIT) with 14.9% stakes. The Noticee further submitted that as it was India's first REIT, the Noticee had various accounting aspects to be addressed before closing the books of accounts and there was a need to carry out various technical evaluations with regards to the method of accounting of the investment of the REIT in its books.

Hence, the Noticee finally submitted that because of these reasons, there was a delay in submissions of results to the stock exchange.

The Adjudicating Officer (AO) observed herein that procedural difficulties faced by the company in closing their books of accounts and carrying out technical evaluations with regards to the method of accounting etc. was their internal matter which did not absolve the Noticee from filing the said disclosures under LODR Regulations.

In the instant matter, the provision of said Regulation did not give any relaxation from complying with the same for any procedural challenges like this. Timely disclosure of relevant information by listed companies is essential for maintaining transparency about the affairs of the Company which helps in eliminating information asymmetry.

Moreover, correct and timely disclosures play an essential role in the proper functioning of the securities market and failure to do so results in depriving the investors from taking well informed investment decision.

It was observed that the Noticee had admitted that it had failed to make the aforesaid disclosures on time and hence the Noticee had not denied the fact that it had violated the provisions of Regulation 52(1), 52(4) and 52(5) of LODR Regulations.

Based on these findings, it was concluded that the Noticee had violated the provisions of Regulations 52(1), 52(4) and 52(5) of LODR Regulations and so, a penalty of Rupees Three lacs was imposed upon the Noticee viz. Embassy Property Development Pvt. Ltd.