- Home
- News
- Articles+
- Aerospace
- Agriculture
- Alternate Dispute Resolution
- Banking and Finance
- Bankruptcy
- Book Review
- Bribery & Corruption
- Commercial Litigation
- Competition Law
- Conference Reports
- Consumer Products
- Contract
- Corporate Governance
- Corporate Law
- Covid-19
- Cryptocurrency
- Cybersecurity
- Data Protection
- Defence
- Digital Economy
- E-commerce
- Employment Law
- Energy and Natural Resources
- Entertainment and Sports Law
- Environmental Law
- FDI
- Food and Beverage
- Health Care
- IBC Diaries
- Insurance Law
- Intellectual Property
- International Law
- Know the Law
- Labour Laws
- Litigation
- Litigation Funding
- Manufacturing
- Mergers & Acquisitions
- NFTs
- Privacy
- Private Equity
- Project Finance
- Real Estate
- Risk and Compliance
- Technology Media and Telecom
- Tributes
- Zoom In
- Take On Board
- In Focus
- Law & Policy and Regulation
- IP & Tech Era
- Viewpoint
- Arbitration & Mediation
- Tax
- Student Corner
- ESG
- Gaming
- Inclusion & Diversity
- Law Firms
- In-House
- Rankings
- E-Magazine
- Legal Era TV
- Events
- News
- Articles
- Aerospace
- Agriculture
- Alternate Dispute Resolution
- Banking and Finance
- Bankruptcy
- Book Review
- Bribery & Corruption
- Commercial Litigation
- Competition Law
- Conference Reports
- Consumer Products
- Contract
- Corporate Governance
- Corporate Law
- Covid-19
- Cryptocurrency
- Cybersecurity
- Data Protection
- Defence
- Digital Economy
- E-commerce
- Employment Law
- Energy and Natural Resources
- Entertainment and Sports Law
- Environmental Law
- FDI
- Food and Beverage
- Health Care
- IBC Diaries
- Insurance Law
- Intellectual Property
- International Law
- Know the Law
- Labour Laws
- Litigation
- Litigation Funding
- Manufacturing
- Mergers & Acquisitions
- NFTs
- Privacy
- Private Equity
- Project Finance
- Real Estate
- Risk and Compliance
- Technology Media and Telecom
- Tributes
- Zoom In
- Take On Board
- In Focus
- Law & Policy and Regulation
- IP & Tech Era
- Viewpoint
- Arbitration & Mediation
- Tax
- Student Corner
- ESG
- Gaming
- Inclusion & Diversity
- Law Firms
- In-House
- Rankings
- E-Magazine
- Legal Era TV
- Events
SEBI: Once Contravention of Statutory Obligations within Stipulated Time are Established Penal Action is Indispensable
![SEBI: Once Contravention of Statutory Obligations within Stipulated Time are Established Penal Action is Indispensable SEBI: Once Contravention of Statutory Obligations within Stipulated Time are Established Penal Action is Indispensable](https://www.legaleraonline.com/h-upload/2023/02/21/904971-sebi.webp)
SEBI: Once Contravention of Statutory Obligations within Stipulated Time are Established Penal Action is Indispensable The Securities and Exchange Board of India (SEBI), levied fines totalling Rs 11 lakh on seven entities for flouting regulatory norms in the matter related to SS Organics Ltd (now known as Oxygenta Pharmaceutical Ltd.) and ruled that, once the contravention of the...
ToRead the Full Story, Subscribe to ![Legal Era](/images/logo.png)
Access the exclusive LEGAL ERAStories,Editorial and Expert Opinion
SEBI: Once Contravention of Statutory Obligations within Stipulated Time are Established Penal Action is Indispensable
The Securities and Exchange Board of India (SEBI), levied fines totalling Rs 11 lakh on seven entities for flouting regulatory norms in the matter related to SS Organics Ltd (now known as Oxygenta Pharmaceutical Ltd.) and ruled that, once the contravention of the statutory obligations within stipulated time are established then the penal action is indispensable irrespective of intention behind omission/delay in executing such statutory obligation. The regulator slapped a fine of Rs 5 lakh on SS Organics Ltd (SSOL) and Rs 6 lakh on six individuals -- Sai Sudhakar Vankineni, D Sadasiva Reddy, Gunreddy Krishna Reddy, Muralidhar Rambathri, Rajasekhar Reddy Puchakayala and Raghavender Rao.
The order came after SEBI conducted an examination in respect of process followed by Oxygenta Pharmaceutical Limited (erstwhile known as SS Organics Limited) (hereinafter referred to as "Company/by name/Noticee No. 1/Oxygenta") for approval and disclosure of Related Party Transactions (hereinafter referred to as "RPT) with one ARR capital Investment Private Limited (hereinafter referred to as "ARR/by name") with a focus to ascertain if there were any violations of the provisions of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act'), Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as "SCRA"), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "LODR Regulations") and uniform Listing Agreement prescribed under SEBI Circular No. CIR/CFD/CMD/6/2015 dated October 13, 2015 (hereinafter referred to as "uniform Listing Agreement").
The regulator found that a loan transaction of Rs 15 crore executed between ARR and SSOL, which was further extended to Rs 35 crore, was more than the turnover of the firm for FY2019-20. The transaction with ARR exceeded the limit of material transaction.
It also found that ARR was the related party of SSOL and the three directors of ARR were holding directorship at SSOL as on the date of loan transaction. It further noted that SSOL had not taken shareholders' approval for the loan transaction with ARR although it exceeds the limit of material transaction. SEBI noted no subsequent disclosure of this RPT was done as required under Regulation 23(9) of LODR Regulations.
The Adjudicating Officer Sahil Malik in his order noted that, Oxygenta vide its submission dated 24th January, 2023 admitted that it had not taken approval of loan transaction as Related party transaction and did not disclose the transaction in Stock Exchange.
Further, the board noted that even though Oxygenta had re-considered this Loan transaction with ARR as Related Party Transaction post receipt of SEBI mails and executed the compliances as required under LODR Regulations, there was substantial delay of 2 Years in executing the compliance from the date of occurrence of event.
In this context the board referred to the order of the Hon'ble SAT in the matter of Akriti Global Traders Ltd. vs. SEBI, observed that argument of appellant that the delay was unintentional and that the appellant has not gained from such delay and therefore penalty ought not to have been imposed is without any merit, because, firstly, penal liability arises as soon as provisions under the regulations are violated and that penal liability is neither dependent upon intention of parties nor gains accrued from such delay.
"It is pertinent to mention here that any omission/delay in executing statutory obligations within stipulated time by any entity is detrimental to the interest of investors in securities market and the same deserves to be viewed seriously. Hence, the violations committed by the company has to be viewed seriously and attract penalty under Section 15HB of the SEBI Act." SEBI stated in its order, while imposing the respective penalties.