Adani Enterprises receives a penalty from Exchanges for breaking SEBI listing rules

23 Aug 2023 , 10:46 AM

Adani Enterprises, the flagship company of the Adani group, was fined by the exchanges BSE and NSE for breaking SEBI listing guidelines pertaining to director appointments.

Each of the two exchanges has imposed a fine of Rs 28,000.

According to SEBI regulations, unless a special resolution is approved to the contrary, no listed firm shall appoint a person or prolong the directorship as a non-executive director who has attained the age of 75.

The company argued that, because the shareholders’ permission was obtained in compliance with applicable regulations, the imposition of a fine by BSE and NSE is unlawful.

Adani Enterprises added that the case of Nectar Life Sciences v. SEBI resolved the legal interpretation. In that situation, SAT noted that neither the necessity of approving a special resolution nor the phrase ‘unless’ depicted in the regulation does mean ‘prior approval’ or is a qualifying condition for the appointment of a person as a director.

‘We additionally like to propose that Regulation 17(1A) of the Sebi Listing Regulations should be interpreted in conjunction with Regulation 17(1C). The regulations allow a business to regularize an appointment or reappointment at the next general meeting or within three months of it, whichever comes first, according to the company. These regulations do not include the word ‘prior approval’ for any appointment or reappointment.

Adani Enterprises is in the process of submitting applications to the NSE and BSE with thorough arguments that emphasize how the company complies with SEBI listing regulations and ask for the waiving of fines levied by the relevant authorities.

There is no violation of the SEBI listing regulations because previous clearance is not necessary for such an appointment or re-appointment, according to the legislation’s stated aim.

The company’s shares on the NSE ended the day on Tuesday 2.09% higher at Rs 2,694.90. The stock has made up some of the lost territory since the Hindenburg charges, but it is still down roughly 30% year to date.

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