Sebi has imposed a fine of Rs 1.5 lakh on Vinal Investments for not registering with the capital market regulator's online system to redress investor complaints.
The regulator found that the company failed to obtain the SCORES (Sebi Online Complaints Redress System) authentication within the stipulated timeframe even after repeated reminders and thus, violated the provisions of the Sebi Act.
The company applied for SCORES authentication in September last year.
"... The noticee (Vinal Investments) has cited the reason for non-compliance as 'ignorance' and 'oversight' on its part and thus, is guilty of consistently failing and neglecting to discharge its duty as a listed company," the order said.
The Securities and Exchange Board of India (Sebi), in August 2012, had asked all listed companies to get SCORES authentication by September 14 of the same year, failing which they would have to face enforcement action.
SCORES, which was launched by Sebi in June 2011, provides a centralised database of all complaints, their online movement to the listed companies concerned and online upload of action taken reports.
"Sebi aims to continuously upgrade its human and
technological potential so that it can effectively utilise the additional enforcement powers vested by the amendment to the Sebi Act that was carried out recently," the regulator said.
"Sebi has in recent years not only modernised its operations, but also put in place modern surveillance systems and an investor-friendly complaints redressal system that has achieved significant accomplishments. The process for investors to enter securities markets has been eased."
Sinha said Sebi and the Indian capital markets have "grown from strength to strength with each passing year" in the 26-year history of the regulator.
"With the advent of Sebi, the Indian markets experienced a sweeping evolution from a highly-controlled merit-based regulatory regime to a market-oriented disclosures-based regulatory regime. Over the years, Sebi has been introducing various measures for the betterment and advancement of the Indian securities market.
"In the course of this remarkable journey, Sebi has incessantly strived to incorporate and adopt various global standards and international best practices within its regulatory framework.
"It has also stood the test of time through various domestic as well as global crises and came out stronger every time. This has resulted in enhanced efficiency, integrity and transparency in the Indian securities market and has also catapulted it into the global league.
"In fact, in international circles today, the Indian securities market is often considered as one of the most developed and highly-respected markets across the globe," he said.
Talking about the new powers including search and seizure, attachment and recovery, power to call for information from any person and powers of disgorgement, Sinha said, "A judicious, righteous and fair application of these new powers by Sebi would be crucial for achieving our overall objectives."
Sinha further said one of the major thrust areas for Sebi has been corporate governance reforms and the alignment of these requirements with the provisions of the new Companies Act.
Another provision requires that units offered to the
public should be at least 25 per cent. This would be aligned with Sebi regulations about the public offer size of 25 per cent, or 10 per cent initially, with an eventual raising of public holding to 25 per cent.
In the case of change in control of sponsor entity on account of a sale, if the number of unitholders, other than related parties, falls below 200 or the public float slips below 25 per cent, the trustees are required to seek a delisting.
This provision would be relaxed by allowing the new sponsor a 1-year window to comply with the minimum public holding requirements by secondary sale or dilution through a fresh issuance of units.
Changes would be made in rules governing the trustees and associates as well, pursuant to which associates of the trustees would no longer form part of the parties to the REIT.
Besides, associates of trustees would be allowed to invest in units of such REIT, subject to such transactions being conducted at an arm's length.
"To rationalise the ambit of the definition of associates so that entities that have no connection to the investment manager/sponsor doesn't get included in the definition of associates," Sebi noted.
Also, the disclosure of litigations related to associates of trustee would not be required to be given.
Sebi had also received representations that the rules do not have an explicit provision with respect to the liability of unitholders.
Accordingly, Sebi has decided to clarify that the unitholder would be an investor and its rights and obligations would be limited to the amount of its investment.
Also, a developer would be allowed to function as a sponsor if at least two projects of the sponsor, or its associates, have been completed. The current norms do not provide the leeway of associates' projects being considered.
It is proposed that in the case of the related party transaction, the trustee will have to obtain confirmation or a fairness opinion from a practising chartered accountant or a valuer, as the case may be.
