Excerpt from Goodreturns Article, Published on Sep 24, 2024.

The Securities and Exchange Board of India (Sebi) imposed a Rs 9 lakh penalty on BGR Energy Systems for multiple disclosure violations and non-compliance with market regulations. Sebi’s investigation revealed that BGR Energy Systems failed to adhere to the Listing Obligations and Disclosure Requirements (LODR) norms, a critical regulatory framework for listed companies. The violations included delayed disclosure of audited financial statements for its subsidiaries BGR Boilers Pvt Ltd and BGR Turbines Company Pvt Ltd for FY 2022-23. The company admitted to missing the 21-day window before the annual general meeting, leading to a breach of disclosure rules.

In addition, Sebi found that BGR failed to disclose, within the mandated 24-hour period, the filing of applications for Corporate Insolvency Resolution Process (CIRP) by 31 applicants between August 2021 and July 2023. This lack of timely updates also violated LODR norms, further compounding the company’s regulatory breaches.

Another significant violation involved related party transactions. BGR Energy Systems borrowed unsecured loans amounting to Rs 85.86 crore in the first quarter of FY 2022-23 and Rs 45.65 crore in July and August 2022, without ensuring proper compliance with the required disclosure rules before executing these transactions.

Sebi’s decision underscores the importance of timely and accurate disclosures in the capital markets to maintain transparency and protect investors’ interests. The penalty serves as a strong reminder for all listed companies to strictly follow market regulations and ensure compliance with LODR norms to avoid legal repercussions and damage to their reputation.

To delve deeper into this topic, please read the full article on Goodreturns.