Spandana Sphoorty pays Rs 25 lakh for settling non-compliance issue with SEBI

28 Oct 2022 , 11:21 AM

NBFC Spandana Sphoorty Financial paid Rs 25 lakh as a settlement amount to the markets regulator SEBI to resolve a matter involving alleged non-compliance with the regulatory rules.

Spandana Sphoorty Financial (SSFL) asked SEBI to resolve the alleged violations by a settlement order “without admitting or contesting the findings.”

The regulator stated in a settlement order that “the existing enforcement procedures for claimed defaults…are settled qua the applicant” and added that it would not take enforcement action against the firm for the default.

Since April 2015, SSFL has been registered with the Reserve Bank of India (RBI). In August 2019, its shares were listed on the BSE and NSE in accordance with its first public offering.

The SSFL’s then-statutory auditor, SR Batliboi & Co LLP, had audited the company’s financial records continuously for eight years.

However, a statutory auditor’s tenure was limited by an RBI notification dated April 2021 to a maximum of three years on a continuous basis, after which they were no longer permitted to audit the same company for the next six years.

NBFCs were subject to the notification as of the second part of the fiscal year 2021—2022. The then-auditor of the SSFL was compelled to resign as the statutory auditor beginning with the second half of the fiscal year ending in March 2022 in compliance with the conditions set forth.

Prior to resigning, Batliboi was obliged to submit the overall audit report for FY 2021—22 as well as the limited review/audit reports for the quarters ending September 2021, December 2021, and the last quarter of the fiscal year 2021—22.

However, SSFL told SEBI that because Batliboi was no longer qualified to serve as statutory auditors, they had resigned without publishing the limited review/audit reports for the aforementioned periods.

It is claimed that the SSFL violated the Listing Obligations Disclosures Requirements (LODR) due to this and other factors.

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