SEBI Imposes Penalties Totaling Rs 35 Lakh On OP Jindal Group Company Hexa Tradex Ltd and Associated Entities For Regulatory Violations
The Securities and Exchange Board of India (SEBI) has imposed penalties amounting to Rs 35 lakh on OP Jindal group company Hexa Tradex Ltd (HTL) and its affiliated entities for multiple breaches of regulatory norms. The penalties were levied following SEBI's investigation into allegations of non-compliance with delisting regulations and other disclosure obligations. The...
The Securities and Exchange Board of India (SEBI) has imposed penalties amounting to Rs 35 lakh on OP Jindal group company Hexa Tradex Ltd (HTL) and its affiliated entities for multiple breaches of regulatory norms. The penalties were levied following SEBI's investigation into allegations of non-compliance with delisting regulations and other disclosure obligations.
The SEBI highlighted significant lapses in due diligence and adherence to regulatory frameworks by Hexa Tradex Ltd and its directors. SEBI held that HTL's board of directors failed to exercise proper oversight despite being aware of ongoing regulatory proceedings against them. They were criticized for relying on limited and outdated information provided by their company secretary, CS Dwivedi & Associates, which did not cover the necessary period for compliance review as per Delisting Regulations.
Under SEBI's Delisting Regulations, 2021, the company and its directors failed to adhere to Regulation 10(3), which mandates that after obtaining information from the Board of Directors, the Company Secretary must conduct due diligence and submit a report certifying compliance with securities laws.
SEBI held that violations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were evident, particularly under Regulation 26(3). This regulation requires all board members and senior management personnel to affirm compliance with the code of conduct annually. However, the directors of Hexa Tradex Ltd, as noted by SEBI, did not exhibit the necessary care, diligence, or professionalism in their duties. They failed to ensure the accuracy of disclosures made to the stock exchanges, particularly regarding compliance with securities laws and the delisting process.
Moreover, SEBI noted that HTL and its associated promoters, including entities like Siddeshwari Tradex Pvt Ltd and JSL Ltd, failed to disclose crucial information in their Detailed Public Announcement (DPA). This violated Regulation 15(2) of the Delisting Regulations. It held this failure deprived investors of material information necessary for informed decision-making during the delisting process.
The adjudication also highlighted shortcomings in the conduct of HTL's Committee of Independent Directors (IDC), which did not provide adequate reasoned recommendations regarding the delisting proposal, as mandated under SEBI regulations.
The IDC of HTL's, as per Regulation 28(2) and (3) of the Delisting Regulations, did not fulfill its obligation to provide reasoned recommendations on the delisting proposal.
Individual penalties were imposed on the responsible parties involved in the violations. Raj Kamal Aggarwal, Ravinder Nath Leekha, Vinita Jha, Girish Sharma, and Pravesh Srivastava, among others, were fined amounts ranging from Rs 2 lakh to Rs 5 lakh for their roles in the regulatory breaches.