Suzlon Energy shares drop over 4% after BSE, NSE serve warning letter

Suzlon Energy shares tanked up to 4.4 per cent at Rs 76.20 per share on the BSE in Thursday’s intraday trade. This came after Suzlon Energy received advisory and warning letters from both the National Stock Exchange (NSE) and BSE due to non-compliance with SEBI’s listing obligations and disclosure requirements (LODR). The warnings pertain to the company's handling of disclosures regarding the resignation of independent director Marc Desaedeleer. 

On June 8, 2024, Suzlon Energy Limited submitted a disclosure concerning the resignation of Mr. Marc Desaedeleer from his position as Independent Director. Following this, the company received advisory and warning letters from both the NSE and BSE Ltd.

Also Read: Iran-Israel war, Sebi F&O: Why Sensex plunged over 1,200 pts intraday today

 

The letter by the exchanges said that Desaedeleer's resignation letter indicated that the corporate governance standards at Suzlon did not meet expectations, particularly regarding openness and transparency in communications.

The company's initial disclosure failed to include a confirmation regarding any material reasons for the resignation, contrary to the requirements stipulated in SEBI LODR Regulation 30, which mandates that Independent Directors must confirm there are no additional material reasons beyond those stated in their resignation letter.

Additionally, the disclosure did not provide information about other listed entities where Mr. Desaedeleer holds directorships, including the categories of directorship and any board committee memberships, the contents of the letter said. 

Following the resignation, Suzlon conducted an analysts' call on June 9, 2024, to address concerns arising from this event. However, the notification of this call was submitted on the same day, which did not meet the regulatory requirement of informing stakeholders at least two working days in advance.

Also Read: Oil stocks surge as crude prices spike amid rising Middle-East tensions

The BSE highlighted that this shorter notice period violates Regulation 30, sub-para 15(a) of the SEBI LODR.

The BSE has directed Suzlon Energy to comply with SEBI LODR requirements by ensuring complete disclosures regarding Independent Directors' resignations, including confirmation of material reasons and details of other directorships. Additionally, the company must inform analysts and institutional investors about meetings at least two working days in advance.

At 11:56 AM, the stock price of the company was down 3.85 per cent to Rs 76.66 a piece on the BSE. By comparison, the BSE’s Sensex was down 1.48 per cent at 83,019 level.