Sebi slaps Rs 35 lakh fine on promoters, shareholder of RT Exports for violating market norms

Regulator Sebi on Wednesday imposed a total penalty of Rs 35 lakh on promoters of R T Exports Ltd and its shareholder Neelkanth Realors for flouting listing and disclosure requirement norms.

The promoters facing penalty are Bhavik Bhimjyani, Rashmi Bhimjyani, Rekha Bhimjyani, Rashmi C. Bhimjyani HUF, N H Popat and R T Agro Pvt Ltd.

The regulator noted that the firm at its 34th annual general meeting (AGM) held in July 2014 adopted a special resolution to enter into a contract with Neelkanth Realtors for purchase of unidentified 40,000 sq ft of saleable area for an amount of Rs 40 crore wherein the related parties had abstained from voting on the resolution.

In December 2016, the firm convened an extraordinary general meeting (EGM) and passed a resolution to rescind the resolution passed in the AGM held in July 2014. Sebi noted that the entire promoter and promoter group voted on the agenda to rescind the resolution.

Consequently, this led to continuation of the resolution passed in the AGM since the requisite majority to rescind the resolution was not available during the EGM.

"The promoter and promoter group by voting against the resolution ensured the continuation of the related party transaction with Neelkanth Realtors Private Limited," Sebi said.

The regulator added that "even a cursory reading of ... LODR Regulations reveals that all entities falling under the definition of related party are barred from voting on an agenda involving a related party transaction irrespective of whether the entity is a party to the particular transaction or not."
While imposing the fine, Sebi said "abstaining from voting during approval on the related party transaction as required under the LODR Regulations are of significant importance in so far as the requirements are aimed at ensuring corporate governance by avoidance of conflict of interests."