Capital markets regulator Securities and Exchange Board of India (SEBI) has ordered Kishore Biyani-controlled Future Enterprises to pay the ₹5 lakh penalty imposed against it on March 14, along with the interest accrued on the amount since the date of the order.
The markets watchdog has ordered the company to pay ₹5,21,000, including the original fine amount, ₹20,000 in interest till June 22, and ₹1,000 in recovery costs. Failing to make the payment will lead to the recovery officer initiating recovery proceedings in accordance with the extant provisions, SEBI states in an order issued on Wednesday.
The recovery action will include attachment and the sale of movable and immovable properties, bank accounts, and even arrest and detention.
SEBI has directed Future Enterprises to avoid mortgage, charge, lease or otherwise deal with any property belonging to the company, except with the permission of the recovery officer.
SEBI also imposed a fine of ₹5 lakh against Future Enterprises over alleged violation of disclosure regulations regarding arbitration proceedings before the Singapore International Arbitration Centre (SIAC).
Amazon had initiated arbitration proceedings before the arbitration court against the Future Group on October 5, 2020, with respect to the latter’s acquisition deal with Mukesh Ambani-led Reliance Industries.
Amazon had sought for emergency relief with respect to the Reliance-Future deal, and SIAC had passed an interim order on October 25, 2020, in favour of Amazon, wherein the promoters of Future Group were barred from going ahead with the deal.
Future Group had received the information for commencement of the SIAC proceedings on October 5, 2020, and its group company, Future Retail, had filed objections before the arbitration centre on October 6, 2020.
“However, the noticee (Future Enterprises) failed to disclose to the stock exchanges as required under the relevant provisions of LODR (Listing Obligations and Disclosure Requirements) Regulations, SEBI Circular and PIT (Prohibition of Insider Trading) Regulations, the information regarding the initiation of the said arbitration proceedings and also the passing of order dated October 25, 2020 in favour of Amazon,” SEBI had stated in its order dated March 14, 2022.
Future had already provided a disclosure regarding its deal with Reliance on August 29, 2020, as a material event, “and therefore the arbitration proceedings and its outcome having an effect of stay on scheme, ought to have been disclosed by the notice,” SEBI had ruled.
As per the SEBI order, Future had disclosed the developments related to the SIAC proceedings and interim relief to Amazon to the stock exchanges only on November 1, 2020, as opposed to the mandated time limit of 24 hours.
Based on these considerations, SEBI had ordered Future to pay a fine of ₹5 lakh within 45 days of the order.