Sebi today imposed a penalty of Rs 5 lakh on ABM International for failing to complete the issue of its bonus shares within the time limit prescribed under the regulator's norms.
As per Sebi rules, a bonus issue has to be implemented by a company within two months from the date of the meeting of its board of directors wherein the decision to announce the issue was taken subject to shareholder's approval.
Noting that the company had completed its bonus issue with a delay of 5 months, the Securities and Exchange Board of India (Sebi) in an order today imposed a "penalty of Rs 5 lakh on the noticee viz ABM International".
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"I find that there was a delay of more than 5 months in the bonus issue and that the noticee vide its replies did admit that the said delay had occurred which is in violation of the provisions ... Of the ICDR (Issue of Capital and Disclosure Requirements) Regulations," Sebi adjudicating officer D Sura Reddy said in an order today.
"Further, I do not find any merit in the submission of the Noticee that the said delay was due to the negligence and was unintentional and that there was no loss to the stakeholders and/or public at large due to the said delay," Reddy added.
The market regulator had received an application from ABM International, a company listed on the Delhi Stock Exchange (DSE), for condonation of delay for Bonus issue.
Upon examination of the application, Sebi observed that the company had failed to complete the bonus issue within the stipulated timeline.
