Sebi slaps Rs 1 lakh fine on 63 moons for not seeking name change approval

For the violation, the regulator has slapped a penalty of Rs 1 lakh on 63 Moons Technologies

Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs 1 lakh on 63 moons Technologies Ltd, formerly known as Financial Technologies (India) Ltd, for failing to comply with the regulatory requirement to get prior approval from the exchanges before fresh name change, under the Listing Obligations and Disclosure Requirements (LODR) regulations.

The allegation was that the company while changing its name from Financial Technologies to 63 moons Technologies, was first required to seek prior approval from the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) for the same, but instead first obtained the fresh certificate of incorporation and then informed the exchanges.

The company argued that the name change was in public domain much before the applicability of the said regulation and it was convered in its Annual Report for 2014-15. In April and May 2016, it has also notified about the name change.

The market regulator observed that the company obtained a certificate of incorporation of change of name on May 27, 2016, from the Registrar of Companies, Chennai and applied to the stock exchanges to update the same in their records through letters on May 27, 2016, and May 31, 2016.

The adjudicating officer observed that the company's submissions cannot be accepted as it is clear that the requirement of seeking prior approval from the Stock Exchanges is a condition precedent before filing request of the name change to Registrar of Companies, which has not been met by the company. Considering that no quantifiable figures available for assessing the disproportionate gains or unfair advantage or specific loss suffered by the investors, and no past default against the company has been revealed under examination, the official imposed a penalty of Rs 1 lakh.

The company changed its name after it has faced with the alleged National Spot Exchange Ltd (NSEL) payment crisis, in which the government has said that about 13,000 investors of the exchange have been affected. The central government has alleged that the magnitude of the fraud by FTIL and its directors led to a payment crisis of Rs 5,600 crore in NSEL.