The Securities and Exchange Board of India (SEBI) has taken action against Premier Polyfilm Ltd. for breaching compliance standards related to related-party transactions (RPTs). The regulator imposed a penalty of ₹3,00,000 on the company for failing to seek necessary approvals from its Audit Committee and shareholders, as mandated by the Listing Obligations and Disclosure Requirements (LODR).
Premier Polyfilm was found guilty of conducting RPTs between April 2022 and May 2023 without prior approvals from the Audit Committee, a critical requirement under the LODR. The company contended that it believed the involved entities were not related parties under the Companies Act, 2013, and claimed to have obtained necessary approvals retrospectively after its statutory auditor pointed out the oversight.
SEBI dismissed these arguments, stating that as a listed company since 1994, Premier Polyfilm should be fully aware of its compliance obligations. “The Noticee being a listed company for two decades, cannot plea ignorance of law. It is a cardinal principle of law that ‘Ignorantia juris non excusat’,” the regulator’s order noted.
Further violations included an RPT exceeding 10% of the company’s turnover in FY23, for which shareholder approval was sought only retrospectively in September 2023. Premier Polyfilm defended itself by stating it was unaware that RMG Polyvinyl was a related party. SEBI rejected this justification, reiterating the responsibility of listed entities to act with prudence.
The company was also found to have made inaccurate submissions in its half-yearly RPT disclosures to the stock exchange for FY23. SEBI concluded that these repeated lapses reflect a failure to meet the governance standards expected of a listed company.
As of December 10, 10:17 AM, shares of Premier Polyfilm are trading at ₹61.97 per share down 2.58% from its previous day’s closing price. Last month, the stock has seen a fall of 4.95%. The stock has a 52-week high and 52-week low of ₹28.41 and ₹71.32 respectively.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Dec 10, 2024, 1:36 PM IST
We're Live on WhatsApp! Join our channel for market insights & updates