2019 (10) TMI 1053 - AT - SEBI

Financial results uploaded in XBRL mode did not contain the audit report - Imposition of a fine for violation of Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015 - HELD THAT - Regulations and the circular require the financial results to be disseminated to the public for a desired purpose so that the investors are made aware of the financials of the Company. Thus, the limited audit report alongwith the financial results are required to be uploaded within 30 minutes of the conclusion of the Board of Directors. The financial results have price sensitive information and cannot remain unpublished and, therefore, the said price sensitive information is required to be disseminated within 30 minutes alongwith an audit report. This was not done. The financial results uploaded in XBRL mode did not contain the audit report which is a vital element and, therefore, filing of the financial result in XBRL mode is not compliance of Regulation 33 read with circular of 30th March, 2017. Thus, when a particular act is required to be done in a particular manner the same is required to be done in that manner alone and not in any other manner. in the given case the imposition of fine is excessive. There is no doubt that the limited audit report alongwith the financial results in PDF form was uploaded on the NSE website as well as on the Company s website within 30 minutes of the conclusion of the Board meeting. The financial results were also published in the newspapers. Thus, there was no deliberate intention on the part of the appellant to violate Regulation 33 of the Listing Regulations. The violation, if any, appears to been done by inadvertent mistake, by a human error. Considering the aforesaid we are of the opinion that in the given circumstances and in the interest of justice the penalty is reduced to ₹ 2,50,000/- which the appellant shall pay to the respondent within four weeks from today. In the circumstances of the case, the appeal is partly allowed

Summary

Issues:
Violation of Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015 leading to the imposition of a fine.

Analysis:
The appellant, a public limited company, was fined for not complying with the requirement to upload unaudited financial results within the stipulated time frame after a board meeting. The circular mandated submission within 30 minutes in PDF mode and within 24 hours in XBRL mode. Failure to comply led to a fine of ?5,54,600 as per the circular dated 30th November, 2015.

Regulation 33(3)(a) & (c) of the Listing Regulations specified the timelines for submitting financial results. The appellant's failure to upload the audit report along with financial results within 30 minutes on the BSE platform, despite uploading on the NSE and the company's website, led to the penalty. The requirements in PDF and XBRL modes were distinct and non-compliance attracted fines as per the circular.

The appellant argued that the glitch causing the delay in uploading the audit report was a technical defect and should not warrant a penalty. Additionally, they contended that the stock exchange's delayed notice of non-compliance exacerbated the situation. However, the tribunal emphasized the importance of disseminating financial information promptly to investors, underscoring the necessity of compliance with the regulations.

While acknowledging the inadvertent nature of the violation and the steps taken to rectify it, the tribunal found the original fine excessive. Considering the circumstances and the lack of deliberate intent, the penalty was reduced to ?2,50,000, to be paid within four weeks. The appeal was partly allowed, modifying the original order accordingly.