New Delhi: Capital markets regulator Sebi on Wednesday fined seven entities, including Reliance Infrastructure, Reliance Power and Incredible Realcon, for not submitting no default statements (NDS) to credit rating agencies.
The regulator imposed a fine of Rs 1 crore on Reliance Infrastructure, Reliance Power and Incredible Realcon, Rs 20 lakh on Paranjape Schemes (Construction) Ltd, Rs 14 lakh on PVP Ventures, Rs 5 lakh on Hindustan CleanEnergy and Rs 1 lakh on Gini. Fiber.
The Securities and Exchange Board of India (SEBI) said in its 90-page order that these companies have been directed to pay the fine within 45 days.
This case relates to the requirement for listed entities that have issued debt securities or other entities that have chosen to list their debt securities to file No Default Statements (NDS) with credit rating agencies (CRAs). .SEBI regulations mandate companies or issuers to submit NDS information to CRA on a monthly basis.
“There may be certain benefits to those issuers by not filing NDS such as continuation or extension of bank accommodation on loans or reduction in cost of borrowing etc. It is an undisputed presumption that the issuers could have derived such benefits by avoiding filing. NDS to CRAs at times of financial stress, says SEBI.
Simply put, the notice recipients (seven entities) can choose not to file NDS during such a stressful period and avoid downgrading the debt securities based on the disclosures to the CRA.SEBI, in its order, said the high penalty has been imposed on Reliance Infrastructure, Reliance Power and Incredible Realcon as they had incurred huge debt, amounting to more than Rs 500 crore.
The order comes after SEBI conducted an examination regarding non-submission of NDS to credit rating agencies by loan issuing companies or non-providing of certain information relating to default or delay in payment obligations etc.
During investigation, it was observed that several entities had not submitted NDS/information to CRA from May 20, 2019 and June 1, 2019 to November 30, 2020, allegedly resulting in violation of the provisions of SEBI regulations.
The regulator imposed a fine of Rs 1 crore on Reliance Infrastructure, Reliance Power and Incredible Realcon, Rs 20 lakh on Paranjape Schemes (Construction) Ltd, Rs 14 lakh on PVP Ventures, Rs 5 lakh on Hindustan CleanEnergy and Rs 1 lakh on Gini. Fiber.
The Securities and Exchange Board of India (SEBI) said in its 90-page order that these companies have been directed to pay the fine within 45 days.
This case relates to the requirement for listed entities that have issued debt securities or other entities that have chosen to list their debt securities to file No Default Statements (NDS) with credit rating agencies (CRAs). .SEBI regulations mandate companies or issuers to submit NDS information to CRA on a monthly basis.
“There may be certain benefits to those issuers by not filing NDS such as continuation or extension of bank accommodation on loans or reduction in cost of borrowing etc. It is an undisputed presumption that the issuers could have derived such benefits by avoiding filing. NDS to CRAs at times of financial stress, says SEBI.
Simply put, the notice recipients (seven entities) can choose not to file NDS during such a stressful period and avoid downgrading the debt securities based on the disclosures to the CRA.SEBI, in its order, said the high penalty has been imposed on Reliance Infrastructure, Reliance Power and Incredible Realcon as they had incurred huge debt, amounting to more than Rs 500 crore.
The order comes after SEBI conducted an examination regarding non-submission of NDS to credit rating agencies by loan issuing companies or non-providing of certain information relating to default or delay in payment obligations etc.
During investigation, it was observed that several entities had not submitted NDS/information to CRA from May 20, 2019 and June 1, 2019 to November 30, 2020, allegedly resulting in violation of the provisions of SEBI regulations.
