TATA CAPITAL PAYS RS 14.4 LAKH TO
SEBI TO SETTLE REGULATORY
VIOLATION IN THE ISSUANCE OF
UNLISTED CUMULATIVE REDEEMABLE
PREFERENCE SHARES (CRPSS) THAT
WERE DEEMED A PUBLIC ISSUE AS IT
HAD BEEN ISSUED TO MORE THAN 200
INVESTORS IN A FINANCIAL YEAR
DETAILS OF THE REGULATORY VIOLATION
The matter relates to two instances where Tata Capital issued unlisted
CRPSs on a private placement basis between April 2015 and March
2017. The issue arose because these shares were subsequently down-sold to
more than 200 investors within a financial
year, which, under the Companies Act 2013 and SEBI regulations, automatically
classifies the issuance as a "public issue". Public issues are
subject to stricter disclosure and compliance requirements, which the company
allegedly did not follow. The Settlement Process
SUO-MOTU
(VOLUNTARY) SETTLEMENT APPLICATION
Tata Capital submitted a suo-motu (voluntary) settlement application to
SEBI, which allowed them to resolve potential enforcement proceedings without
either admitting or denying the regulatory findings. The settlement amount of
Rs 14.4 lakh was remitted by Tata Capital on October 24, 2025, after which SEBI
declared the matter settled, effectively closing the regulatory chapter
LESSONS LEARNED
FROM THIS CASE STUDY
This settlement is part of SEBI's framework that allows entities to avoid prolonged litigation by paying a fee and, if required, implementing corrective measures.
The issuance of these CRPSs is deemed to be a "public issue" if it is issued
to more than 200 investors in a financial year and the applicant is
in violation of the provisions of Companies Act 2013 and SEBI's (Issue and Listing
of Non-Convertible Redeemable Preference Shares) Regulations, 2013
TATA CAPITAL PAYS RS
14.4 LAKH TO SEBI TO SETTLE REGULATORY VIOLATION IN THE ISSUANCE OF
UNLISTED CUMULATIVE REDEEMABLE PREFERENCE SHARES (CRPSS) THAT WERE DEEMED A
PUBLIC ISSUE AS IT HAD BEEN ISSUED TO MORE THAN 200 INVESTORS IN A FINANCIAL
YEAR
R V SECKAR,FCS, LLB, 79047 19295
