Regulator Sebi on Wednesday imposed a penalty of Rs 10 lakh on IL&FS for not disclosing price sensitive information, pertaining to fund raising via rights issue and asset disinvestment plan to the BSE.
Sebi found that IL&FS did not disclose the decision of its board meeting held in July last year about equity infusion plan by way of rights issue, amounting to Rs 4,500 core to the stock exchange.
Besides, the company failed to make disclosure about board's decision related to specific asset disinvestment plan to reduce the overall debt by Rs 30,000 crore to the exchange, it noted.
The company was under the obligation to promptly inform the decisions taken in its board meetings dated July 21, 2018 and August 29, 2018 to the BSE. However, it failed to disclose the same and violated the provision of Listing Obligations and Disclosure Requirements (LODR) Regulations.
"The failures by the noticee (IL&FS) are blameworthy and have also occurred due to lethargic indifference and needless procrastination as the noticee selectively chose to make disclosure to BSE on August 29, 2018 about certain information but did not disclose to BSE any of the impugned price sensitive information and those having bearing on performance/operation of the noticee," Sebi said in its 17-page order.
Accordingly, Securities and Exchange Board of India (Sebi) has slapped a fine of Rs 10 lakh on Infrastructure Leasing & Financial Services Ltd (IL&FS) and has to pay the amount within 45 days.
With regard to the rights issue plan, IL&FS contended that it did not inform the BSE because the plan was at discussion stage in July board meeting and was finally approved in the board meeting held on August 29, 2018 and thereon it had made disclosure to the BSE on same date. However, Sebi noted that the company had shared the information with credit rating agency on July 23, 2018.
"If the noticee could share the important information about the rights issue of equity shares at discussion stage, as claimed, with CRA, then there are no justifiable reason for withholding the same from the stock exchange," the regulator pointed out.
In respect to non-disclosure of specific asset disinvestment plan', IL&FS contended that there was no specific corporate action or approval undertaken by its board in the meeting dated August 29, 2018 in relation to this matter. Further, the same information was disseminated on the the company's website on August 29, 2018.
The company also contended that its right issue of equity shares and specific asset divestment plan both did not materialize and therefore, it did not result in any loss to the investors or securities markets.
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