The Securities Appellate Tribunal has upheld a Sebi's order against Gaylord Commercial Company in a matter related to delay in making annual disclosures of its promoters' holding to stock exchanges.
In January, the market regulator had imposed Rs 2 lakh fine on Gaylord Commercial for violations of the disclosure norms. The ruling was subsequently challenged by Gaylord Commercial before the tribunal.
Gaylord Commercial had submitted with SAT that the penalty of Rs 2 lakh was not justified as its was "arbitrary, unreasonable and excessive", among others.
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In an order dated April 10, SAT said that Gaylord Commercial's failure to comply with disclosure norms continued for 165 days which as per law made the company liable to pay a penalty at the rate of Rs 1 lakh per day amounting to a total of Rs 1.65 crore.
"...The AO (Sebi's adjudicating officer) after taking into consideration all mitigating factors has imposed penalty of Rs 2 lakh which cannot be said to be unreasonable or excessive," SAT said in the order.
SAT also observed that the argument by the company that it was a small and had not violated any provisions in the past "do not merit consideration".
According to SAT " liability to pay penalty under...Sebi Act, 1992 has to be computed on the basis of each day during which the failure to comply with the regulation has continued and liability to pay such penalty is not dependent upon the fact as to whether such failure has occurred for the first time or not".
