IL&FS Financial Services Ltd has settled with markets regulator SEBI a case pertaining to alleged non-submission of 'fit and proper' declaration to the exchange after paying Rs 13.65 lakh. This comes after IL&FS proposed to settle the case "without admitting or denying the findings of fact and conclusions of law" through a settlement order."The instant adjudication proceedings initiated against IL&FS Financial Services Ltd vide show cause notice...dated April 12, 2022 are hereby disposed of," the Securities and Exchange Board of India (SEBI) said in a settlement order passed on Wednesday.
As per the show cause notice issued by SEBI, Metropolitan Stock Exchange of India Ltd (MSEI) in January 2020 informed SEBI that it had submitted 'fit and proper' declarations as required under the SECC or Securities Contracts (Regulations) (Stock Exchanges and Clearing Corporations) Regulations. It also stated that declarations of fit and proper were received from all shareholders holding more than 2 per cent stake of MSEI, barring IL&FS, which owned 2.48 per cent equity shares of the exchange.
MSEI further added that in this regard it issued several reminders to IL&FS in the past several months. However IL&FS did not respond. Under the SECC Regulations, any entity holding more than 2 per cent stake of a stock exchange is required to file a declaration to such bourse that it complies with fit and proper criteria. By failing to file declaration to MSEI, IL&FS was allegedly in violation of of SECC norms.
Pending adjudication proceedings initiated through a show cause notice, IL&FS filed settlement application with SEBI in June 2022 to settle the case. Thereafter, SEBI recommended Rs 13.65 lakh as the settlement amount, besides, IL&FS was asked to make the requisite declaration of 'fit and proper' criteria to MSEI. Following this, IL&FS submitted the fit and proper declarations for financial years 2022, 2021, 2020 and 2019 to MSEI and also paid the settlement amount Rs 13.65 lakh. Accordingly, it settled the case with SEBI.