Description

SEBI adjudication order against Binny Limited and its directors for violations of LODR Regulations related to corporate governance, disclosure requirements, and listing obligations.

Summary

SEBI has issued an adjudication order (ORDER/JS/RJ/2025-26/31748-31752) under Section 15-I of the SEBI Act, 1992 against Binny Limited and four of its directors - M. Nandagopal (Executive Director and MD), Arvind Nandagopal (Managing Director), T. Krishnamurthy (Executive Director), and Rajeev Bakshi (Non-Executive Independent Director). The order follows complaints and SEBI examination revealing violations of LODR Regulations related to corporate governance norms and disclosure requirements during April-May 2024.

Key Points

  • Binny Limited (BSE-listed company, PAN: AAACB2529G) and four directors face adjudication proceedings
  • Violations identified through complaints received by SEBI and subsequent examination
  • Multiple breaches of LODR Regulations including disclosure and corporate governance requirements
  • Board composition during violation period included 9 directors (3 executive, 4 independent, 2 non-executive non-independent)
  • Directors alleged to have violated specific provisions related to their fiduciary duties

Regulatory Changes

No new regulatory changes introduced. This order enforces existing LODR Regulations and corporate governance standards.

Compliance Requirements

For Binny Limited:

  • Must comply with Regulations 27(2), 31(1)(b), 33(d) - corporate governance and financial reporting requirements
  • Must adhere to Regulation 30 disclosure requirements including timely material event disclosures as per Schedule III
  • Must follow SEBI Circular SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023
  • Must comply with Regulations 4(1)(g) and 4(1)(e) regarding fair disclosure and timely dissemination

For Directors (Noticee Nos. 2-5):

  • Must fulfill obligations under Regulations 4(2)(f)(ii)(8) and 4(2)(f)(iii)(3) related to director responsibilities and fiduciary duties

Important Dates

  • April-May 2024: Period during which alleged violations occurred
  • June 2024: Corporate governance reports filed with BSE revealing board composition
  • Various appointment dates: Directors appointed between March 1996 and May 2024 (as listed in Table 1)
  • October 30, 2025: Date of adjudication order publication

Impact Assessment

Company-Specific Impact: Binny Limited faces regulatory penalties and reputational damage from multiple LODR violations. The company must strengthen compliance mechanisms for disclosure requirements and corporate governance standards.

Market Impact: Limited direct market impact as this affects a single listed entity. However, the order serves as a compliance reminder for other listed companies regarding:

  • Timely disclosure of material events
  • Adherence to corporate governance reporting requirements
  • Director fiduciary responsibilities
  • Importance of following SEBI circulars and LODR provisions

Regulatory Precedent: Reinforces SEBI’s active enforcement of LODR Regulations and willingness to take action against both companies and individual directors for governance and disclosure failures. Directors of listed companies should note their personal liability for compliance failures.

Impact Justification

Enforcement action against a specific listed company for multiple LODR violations. High severity due to regulatory penalties but medium impact as it affects only one company and serves as precedent for compliance standards.