SEBI: Non convertible debt securities are covered under Regulation 3 of LODR Regulations

SEBI: Non convertible debt securities are covered under Regulation3 of LODR Regulations

The Adjudicating Officer (AO) of the Securities and Exchange Board of India (SEBI) has held that alleged violation, of the provisions of Regulation 6(2)(a) of SEBI (Listing Obligations and Disclosure Requirements)Regulations,2015(LODR Regulations), against Mr. Pradeep Soni (Noticee), Compliance Officer of the U.P. Power Corporation Limited (UPPCL), did not stand established.

Herein, SEBI had carried out an examination to ascertain compliance status of UPPCL with relevant provisions of LODR Regulations, whose non-convertible debentures (NCDs) have been listed on Bombay Stock Exchange. During the examination, it was observed that the UPPCL did not make requisite disclosures under various provisions of LODR Regulations and resultantly, the Compliance Officer by not ensuring the conformity with regulatory provisions applicable to UPPCL did not comply with Regulation 6(2)(a)of LODR Regulations.

The Noticee contested the Show Cause Notice by stating that no individual can be appointed as Whole Time Company Secretary (key Managerial personnel) in more than one Company. It was also put forth that the Noticee had joined the U.P. Rajya Vidyut Utpadan Nigam Limited on 16.10.2016 and took charge of Whole Company Secretary on 31.07.2017.

As per the Noticee, he was invited for the first time in 129th Board Meeting of UPPCL held on19.06.2017 and as the post of Company Secretary was vacant, the Noticee was engaged in additional work profile to assist in secretarial work for the time being under interim arrangement by office order of UPPCL.

With respect to the LODR Regulations, it has been elucidated by the AO that NCDs issued by UPPCL are privately placed and are listed on BSE. As per Regulation 3 of LODR Regulations, LODR Regulations are applicable to the listed entity that has listed any of the designated securities as specified under Regulation 3.

Non-convertible debt securities are one such securities covered under Regulation 3 of LODR Regulations. Hence, the department of SEBI had ascertained non-compliance by UPPCL with certain post issue and continuous listing obligations as provided under Chapter III and Vof LODR Regulations.

The AO in this order has referred to the post hearing email submissions of UPPCL dated October 01,2020 wherein it was stated that the Noticee, Company Secretary of U.P. Rajya Vidyut Utpadan Nigam Limited was entrusted with additional charge to look after the conducting of Board Meeting related work of the Company till 05.03.2020.

It was also discussed in this mail that the Board of Directors in its Meeting held on 05.03.2020 appointed Company Secretary as Compliance Officer and during the period under enquiry, the post of Company Secretary as well as Compliance Officer was vacant. Thus, it has been concluded on these findings that there was no dedicated Compliance Officer under SEBI Laws, rules and Regulations which resulted in some delay in Compliances.

Hence, the alleged violation against the Noticee did not stand established. The AO has disposed of the Adjudication Proceedings initiated against the Noticee without imposing any monetary penalty