Taking to task the companies without a woman director, SEBI on Wednesday announced a minimum Rs. 50,000 fine on them and warned of further action, including against promoters and directors, for non-compliance beyond September.
Without naming the companies that failed to appoint at least one woman director within the stipulated deadline of March 31, SEBI announced a four-stage penalty structure wherein fines increase with the passage of time.
SEBI had warned of “serious consequences” for non-compliance, but a large number of companies, including many state-run firms, actually failed to meet the deadline.
The regulator has asked the stock exchanges to levy the fines as the violation relates to the listing agreement. As a result, the fines would multiply for the companies listed on multiple exchanges.
As per estimates, more than 1,000 companies on the BSE and nearly 200 on the NSE are in non-compliance of the requirement, which was first announced by SEBI in February last year with an initial deadline of October 1, 2014, that was later extended by six months.
As per the fine structure announced on Wednesday, the companies can escape further regulatory action, beyond monetary fine, if they comply within next six months, that is till September 30, 2015.
The listed companies complying between April 1 and June 30 will have to pay only Rs. 50,000 as penalty. Those complying between July 1 and September 30 this year would need to pay Rs.50,000 and an additional Rs.1,000 per day till the date of compliance.
The listed companies complying on or after October 1, 2015, will have to pay Rs. 1.42 lakh, plus Rs. 5,000 per day till the date of compliance.
“For any non-compliance beyond September 30, 2015, SEBI may take any other action, against the non-compliant entities, their promoters and/or directors or issue such directions in accordance with law, as considered appropriate,” the regulator said in a circular.
At least 100 companies had actually announced the appointment of women directors on April 1, but they will also have to pay the penalty.
SEBI said the direction has been issued “in the interest of trade and public interest and for the protection of the interests of investors in securities and to promote the development of, and to regulate the securities market and shall come into effect immediately“.
