Bse Fines Companies Not Declaring Results In Time
The Bombay Stock Exchange (BSE) has commenced imposition of a fine on companies which do not adhere to Clause 16 of the listing agreement of the exchange.
Clause 16 deals with companies which do not publish their results and announce book-closure details in time.
According to market sources, the BSE has taken this action against nearly 400 to 500 companies. The fine, imposed on a daily basis, is at the rate of 0.0001 per cent of the paid up capital of the company. Approximately, Rs 8-10 lakh has been said to have been collected by way of fine.
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The penalty system comes at a time when the issue of making corporates more accountable in reporting/ providing data to the exchange and the investing public has become crucial.
What worries a section of the market is that the penalty charged is too low for the corporates to be concerned.
The BSE has, in recent times, been hampered by lack of powers to penalise corporates or the board of directors for their inaction. The exchange, on its part, has often sought more powers so that stringent action could be taken.
Top BSE officials remain tight-lipped over charging of such a fine. The action of the BSE is commendable, said a broker.
Companies will not take investors for granted any more. In the past, many companies used to announce their half and full-yearly results as and when they wished.
With this rule, companies will be forced to adhere to Clause 16 of the listing agreement or they would run the risk of not being allowed to be traded at the exchange, he added.
There are a substantially large number of companies whose stocks have been suspended in the recent past. However, many of these have walked away without any stringent action being taken against them. Those companies who wish to see their shares listed at the exchange will have to pay the penalty amount, said a stock exchange official.
Under the BSEs existing listing norms, the financial results have to declared within a month of the half year ending or full year ending while the book closure has to announced within three months of the year ending.