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The market regulator underscored that ignorance of the law is not a valid defence for such lapses.
In an order issued on December 9, SEBI adjudicating officer Asha Shetty noted that the company had violated the Listing Obligations and Disclosure Requirements (LODR) by failing to act with due prudence while carrying out RPTs.
“As a listed entity, Noticee did not conduct as per required prudence in carrying out such RPTs and therefore, violated the provisions of LODR,” the order stated.
The violations involved RPTs conducted between April 2022 and May 2023, without prior approval from the audit committee. Premier Polyfilm contended that it believed the involved entities were not related parties under the Companies Act, 2013. It claimed to have obtained the necessary approvals after the error was pointed out by its statutory auditor.
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SEBI, however, dismissed this justification, emphasising that the company, listed since 1994, should be well-versed in compliance requirements. “The Noticee being a listed company for two decades, cannot plea ignorance of law. It is a cardinal principle of law that ‘Ignorantia juris non excusat’,” the order read.
The regulator also highlighted a separate violation where the company conducted an RPT exceeding 10% of its turnover in FY23 but sought shareholder approval retrospectively in September 2023. The company argued that it was unaware that RMG Polyvinyl was a related party, a claim SEBI rejected, reiterating that a seasoned listed entity cannot feign ignorance.
Further, the company made inaccurate submissions in its half-yearly RPT statements to the stock exchange for FY23. Premier Polyfilm stated it did not disclose certain values, believing that RMG Polyvinyl was not a related party. SEBI’s order concluded that such repeated lapses indicate a failure to uphold compliance standards expected of a listed company.
The penalty highlights SEBI’s strict stance on ensuring corporate governance and transparency in financial dealings of listed entities.
The Premier Polyfilm stock ended the day (December 9) at ₹63.79, up ₹3.03, or 4.99%.
(Edited by : Shoma Bhattacharjee)
First Published: Dec 9, 2024 8:35 PM IST
