The National Stock Exchange (NSE) and the BSE cracked the whip on several listed firms that had failed to comply with listing regulations on Wednesday. Adani Ports and Special Economic Zone, Jet Airways, IL&FS Engineering and Construction Company; Bharat Petroleum Corporation, MOIL, and SJVN were among the firms that were penalised.
The exchanges imposed fines between Rs 100 and Rs 4,50,000 on these firms for breach of different listing regulations. Market experts said while the fine amount was paltry, the action would send a strong message to listed companies to comply with the listing rules.
The regulations that they flouted include non-appointment of women directors; non submission of corporate governance report within due date; delay or non-disclosure of record date for dividends; non-submission of annual report, and non-submission of shareholding pattern.
Besides imposing penalties, bourses also have powers to freeze the holdings of the promoters if the company fails to comply with the listing regulations or pay the fine levied within the stipulated period. Also, if companies remain non-compliant for two consecutive quarters, then the exchanges can impose trading curbs on their securities, such as allowing trading only on a trade-for-trade basis.
The NSE list was for the 250 non-compliant companies for the quarter ended March 31, 2019. Meanwhile, the BSE issued a separate list of about 1,000 companies. The list issued by the BSE had 515 companies, which had failed to appoint a qualified company secretary as the compliance officer; 173 companies that did not have proper board composition and 121 firms that had not submitted shareholding pattern.
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