Sebi imposes a penalty of Rs 7,00,000 on NHAI for disclosure lapses

During its investigation, Sebi found that NHAI delayed filing of its half-yearly financial results by 4 days to 78 days between 2015-16 to 2018-19.

Capital markets regulator Sebi on Tuesday imposed a penalty of Rs 7 lakh on the National Highways Authority of India (NHAI) for delay in making timely disclosure about financial results.

Sebi had conducted an examination in the matter of NHAI from financial year 2015-16 to 2018-19.

During its investigation, Sebi found that NHAI delayed filing of its half-yearly financial results by 4 days to 78 days between 2015-16 to 2018-19.

The regulator had advised NHAI for strict compliance with the LODR (Listing Obligations and Disclosure Requirement) Regulations in future.

However, despite the advisory by Sebi, NHAI did not submit the financial results on time with respect to the half year ending on September 30, 2018 and March 31, 2019.

The results were submitted with a delay of 19 days and 78 days, respectively.

"There was repeated failure (seven instances during FY 2015-16 to FY 2018-19) on the part of the noticee (NHAI) regarding compliance with the provisions ...LODR Regulations," Sebi said in an order.

Accordingly, the regulator imposed a penalty of Rs 7 lakh on NHAI.

In its reply to a show cause notice (SCN) issued by Sebi, NHAI said it seeks approval of the majority of its board members in relation to all matters including approval of unaudited half yearly results.

Suzlon, Jaypee Infra, others disclose default as Sebi tightens norms

The disclosures were made after a November 2019 Securities and Exchange Board of India's directive asking companies to disclose defaults of 30 days and above.

Suzlon, Jaypee Infratech, Hindustan Construction Co (HCC), Reliance Naval and Engineering, Gayatri Projects and numerous different organizations on Tuesday revealed their defaults in their administrative filings to stock trades.

The exposures were made after a November 2019 Securities and Exchange Board of India's order soliciting organizations to reveal defaults from 30 days or more.

Suzlon Energy said the organization's present default sum remained at Rs 7256 crore.

The exposure included the date of default was March 2019.

Of this, Rs 538 crore was expected as intrigue, while the rest of the was a default on chief sum payable. The organization in its exposure pegged its all out budgetary obligation at Rs 14048 crore.

Jaypee Infratech's present default remained at Rs 6,721 crore, while its all out obligation was Rs 13,438 crore. The exposure included the organization was proclaimed a non performing resource in September 2015.

HCC has defaulted on an installment of Rs 277 crore while its absolute obligation was Rs 10,390 crore.

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Experts raise alarm bells on talent flight amid crackdown on audit firms

On the other hand, officials at regulatory and enforcement agencies said the audit firms tend to put the blame on individuals after finding themselves in the dock for their alleged role in frauds.

Amid a crackdown on erring auditors in cases of alleged financial irregularities, some experts and top executives at some audit firms are raising alarm bells about a possible flight of fresh talent from the profession.

While few are willing to speak openly against actions taken by regulatory and enforcement agencies against auditors for failing to flag financing bungling, senior executives at major audit firms said it was wrong at times to ban an entire audit network for alleged lapses by one or two individuals.

On the other hand, officials at regulatory and enforcement agencies said the audit firms tend to put the blame on individuals after finding themselves in the dock for their alleged role in frauds.

The officials have often pointed out that auditors are supposed to be the conscience-keepers of a company and it is their duty to ring the alarm bells even at the slightest hint of a financial wrongdoing.

In recent times, there has been a spate of actions against auditors, including against PwC in the Satyam case and against Deloitte and BSR in the IL&FS matter.

Markets watchdog Sebi has moved the Supreme Court against the Securities Appellate Tribunal's ruling that had quashed a two-year ban on PwC in connection with the Rs 7,800-crore Satyam scam.

In the IL&FS case, the Bombay High Court has granted a stay on NCLT proceedings against the company's erstwhile auditors, while some auditors were recently arrested by the Economic Offences Wing of the Mumbai Police in the NSEL matter, though they were released subsequently on bail.

Some auditors, including in the case of IL&FS matter, have come under the scanner of the Serious Fraud Investigation Office (SFIO) while National Financial Reporting Authority (NFRA) is looking into alleged accounting lapses at Infosys.

"There are fewer people now who are excited to join the audit profession, primarily due to a narrative that has got built around it in the recent times," said one of the partners at a leading audit firm, citing actions taken by regulatory and enforcement agencies and the judiciary.

Business Standard