The Securities and Exchange Board of India on Wednesday announced a penalty of Rs 50,000 for all listed companies that have failed to appoint a woman director on their board by March 31, 2015. It further warned to take action against the promoters and directors, if the companies remain non-compliant beyond six months.
While almost 189 companies failed to comply with requirement of having a mandatory woman director on their board by April 1, 2015 Sebi has prescribed that all companies that do not appoint a woman director till June 30, 2015 will have to pay a penalty of Rs 50,000.
The penalty, however, will rise with passage of time and Sebi said that for each day of non-compliance beginning July 1, 2015, there will be additional penalty of Rs 1,000 per day. This will further go up is the companies do not comply by September 30. Sebi has proposed that beginning October 1, 2015 the penalty for non-compliance will be Rs 5,000 per day.
Sebi on Wednesday asked the stock exchanges to levy the fines as the violation relates to the Listing Agreement and therefore companies that are listed at multiple exchanges will see their fines multiply.
While Sebi had warned of “serious consequences” for non-compliance, a large number of firms, including many state-run firms, failed to meet the deadline. Prime Database, said of the 181 companies that were non-complaint till April 4, 2015, 31 were PSUs.
Prime Database MD Pranav Haldea said that the fine is small, but “at least some action has been taken”.
As per estimates, over 1,000 firms on the BSE and 180 on the NSE are in non-compliance of the rule, first announced by Sebi in February 2014 with an initial deadline of October 1 which was later extended by six months.
As per the structure announced on Wednesday, firms will have to pay only the monetary fine and can escape further regulatory action if they comply within next six months, that is till September 30.
“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.
With inputs from PTI