Decoding the Ambiguity

SEBI's push for disclosure compliance has sparked legal-judicial debates, especially over penalties under Section 23E of SCRA—highlighting the tension between enforcement and interpretation

- ABHISHEK BAID & RAVINDER KUMAR

ABHISHEK BAID IS A PARTNER AND RAVINDER KUMAR IS A SENIOR ASSOCIATE AT EXPLETUS LEGAL.

In various jurisdictions across the world, the corporate sector revolves around the various milestones achieved in corporate governance. One of the important facets of corporate governance structure is timely disclosures and transparency maintained by corporates while disseminating information through stock exchanges.

In India also, various reforms have been brought in to provide the mechanism of making such disclosures from Listing Agreement to SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015. Such delegated legislations contain extensive provisions while dealing with disclosures by company and compliances to be done thereafter.

To deter the non-compliant companies, penalty provisions are provided in SEBI Act, 1992 and SCRA, 1956. Time and again, SEBI, by imposing stringent penalties on the defaulting companies, has given stern warning and set an example for Listed Companies to adhere to the extant laws pertaining to listing and disclosures.