SEBI Penalizes Reliance Home Finance With Rs 8 Lakh Fine For Disclosure Lapse

SEBI Penalizes Reliance Home Finance With Rs 8 Lakh Fine For Disclosure Lapse

The Securities and Exchange Board of India (SEBI) imposed a penalty of Rs 8 lakh on Reliance Home Finance on Friday for its failure to disclose information regarding an NCLT order issued in June 2021 to the stock exchanges. SEBI stated that the fine must be paid within 45 days.

Sebi's order highlighted that Reliance Home Finance failed to disclose the NCLT order dated June 21, 2021, and omitted to provide information about appeals filed by itself and Bank of Baroda against the NCLT's order.

According to the NCLT's directive, Reliance Home Finance was instructed to pay interest on the debentures at the contractual rate, computed until realization, within two months. Subsequently, it was mandated to redeem the debentures upon payment of the principal within three months thereafter.

Based on the order, the outstanding amount owed and payable for the secured non-convertible debentures (NCDs) exceeded Rs 2,850 crore.

The company was obligated to make the disclosures within 24 hours following the issuance of the order, as per Sebi's LODR (Listing Obligations and Disclosure Requirements) rule.

"The noticee (Reliance Home Finance) cannot be absolved from making disclosures, as the same were disclosed in the annual report or the information or event details being covered by the media or on various websites.

"This cannot be considered compliance with the provisions of the LODR Regulations, 2015, as the required disclosures were supposed to be made by the Noticee to the exchanges," Sebi said.

Furthermore, the firm made delayed disclosures concerning its debt resolution plan, including the invitation of an Expression of Interest bid dated July 29, 2020, and the approval of the resolution plan on June 19, 2021.

The disclosures were required to be made no later than July 30, 2020, for the invitation of the Expression of Interest bid and June 20, 2021, for the approval of the resolution plan.

However, the company had made disclosures of the two events to the exchanges on July 31, 2020, and June 21, 2021, respectively, with a delay of one day for each event.

Accordingly, the regulator has imposed a "penalty of Rs 8 lakh on the noticee for the violation of provisions of... LODR Regulations, 2015, read with clause 2 of the Listing Agreement.".

Nevertheless, the company disclosed the two events to the exchanges on July 31, 2020, and June 21, 2021, respectively, with a one-day delay for each event. As a result, the regulator has imposed a penalty of Rs 8 lakh on the company for violating the provisions of the LODR Regulations, 2015, read with clause 2 of the Listing Agreement.