SEBI Fines Williamson Magor and Company Rs2 Lakh for Breach of Listing Agreement
Moneylife Digital Team 11 April 2024
The Securities and Exchange Board of India (SEBI) has imposed a fine of Rs2 lakh on Williamson Magor and Company Ltd (WMCL) for tardiness in disclosing the default on interest payment and redemption of debentures, as well as for delays in revealing encumbrances on shares created and failing to disclose the reasons for such encumbrances. This is the second time in the past nine months that SEBI has imposed penalties on WMCL.
In its order, Shashi Kumar Valsakumard, adjudicating officer (AO) of SEBI says, “WMCL was under a statutory obligation to abide by the provisions of erstwhile equity listing agreement, which it failed to do in relation to the said related party transaction (RPT). The violations by the WMCL attracts monetary penalty. Therefore, I feel it appropriate to levy a penalty which is commensurate with the nature of violation, which acts as a deterrent factor for the WMCL and others in protecting the interest of investor in Securities market."
SEBI received a complaint through SCORES, alleging that WMCL, entered into a RPT with Babcock Borsig Ltd (BBL), its associate company, involving sale of 1,13,360 shares of Woodlands Multispecialty Hospital Ltd (WMHL). It was alleged that the transaction was undertaken without corporate approvals and without making appropriate disclosures under the accounting standards.
During the investigation, SEBI found that WMCL has not provided a specific response to the allegation of failing to obtain prior approval from the audit committee for selling 1,13,360 shares of WMHL to BBL its associate company. “This suggests a lack of defense, potentially admitting to the allegations. Additionally, in a previous response to SEBI, WMCL claimed that board approval sufficed and audit committee approval wasn't necessary, hence it didn't seek audit committee approval for the transaction with BBL.”
On 28 September 2023, SEBI had imposed a penalty of Rs2 lakh on Williamson Magor and Company for delay in disclosure about default on interest payment and redemption of debentures and encumbrance on shares created and failure to disclose reasons for encumbrance.
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