Tata Technologies, the technology arm of Tata Motors, has reached an amicable resolution with the Securities and Exchange Board of India (Sebi) concerning alleged violations of disclosure and investor protection guidelines. The company has agreed to pay a settlement amount of Rs 25 lakh to close the matter.
In a proactive move, Tata Technologies voluntarily submitted a settlement application to Sebi, in which it neither admitted nor denied any wrongdoing. This action aimed to preclude potential enforcement proceedings associated with the alleged breaches of the Disclosure and Investor Protection (DIP) guidelines.
Sebi, in its settlement order issued on September 27, confirmed the resolution, stating that any proceedings related to the violations are now resolved in favor of Tata Technologies.
The infractions in question stemmed from multiple preferential allotments made by the company between December 27, 2000, and March 13, 2008. These allotments led to the issuance of shares to more than 49 shareholders within a single financial year, which was in contravention of Sebi’s DIP guidelines.
As part of the resolution, Tata Motors, the parent company of Tata Technologies, was obligated to extend an offer to all eligible existing equity shareholders of Tata Technologies as of November 11, 2022. The offer allowed shareholders to tender their shares and receive a refund.
However, none of the eligible shareholders chose to tender their shares to the parent company, a fact that was independently verified by a Chartered Accountant.
Tata Motors, listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), also took steps to address the matter. The applicant (Tata Technologies) filed a compounding application for a breach of a specific section of the Companies Act with the National Company Law Tribunal (NCLT).
In May, NCLT disposed of the compounding petition, granting approval for compounding subject to the applicant paying compounding fees of Rs 3.42 crore.
About Tata Technologies:
Tata Technologies Limited, a subsidiary of Tata Motors, is a renowned Indian multinational specializing in product engineering services. The company offers a wide range of expertise, including engineering and design, product lifecycle management, manufacturing, product development, and IT service management. Its clientele primarily consists of automotive and aerospace original equipment manufacturers, along with industrial machinery companies.
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