Description

SEBI imposes penalty on Yash Chemex Limited for non-disclosure of acquisition and sale of shares of unlisted subsidiary Yasons Chemex Care Limited during October 2017 to December 2022, violating LODR Regulations.

Summary

SEBI has issued Adjudication Order No. Order/SM/BK/2025-26/31966 against Yash Chemex Limited (PAN: AAACYU2734L) for violations of Regulation 30(2) read with Regulation 30(6) and Clause 1 of Para A of Part A of Schedule III to SEBI LODR Regulations, 2015. The company failed to disclose transactions involving purchase and sale of securities of its unlisted subsidiary, Yasons Chemex Care Limited, during the period from October 2017 to December 2022. The proceedings were initiated under Section 15-I of the SEBI Act, 1992.

Key Points

  • Yash Chemex Limited acquired/sold shares of its unlisted subsidiary Yasons Chemex Care Limited between October 2017 and December 2022
  • The company failed to make required disclosures under Regulation 30(2) and Para-A of Part-A to Schedule III of LODR Regulations
  • Specific violation: Non-disclosure of acquisition of shares and subsequent changes in shareholding percentage above prescribed limits
  • Adjudicating Officer Shri Amar Navlani (General Manager, SEBI) was initially appointed on June 03, 2025
  • Undersigned took over as Adjudicating Officer on September 19, 2025 following transfer
  • Show Cause Notice (SCN) No. SEBI/EAD3/P/OW/2025/18185/1 was issued on July 08, 2025
  • Penalty proceedings initiated under Section 15A(b) of SEBI Act, 1992

Regulatory Changes

No new regulatory changes introduced. This order enforces existing disclosure requirements under SEBI LODR Regulations, 2015, specifically Regulation 30(2) read with Regulation 30(6) and Schedule III provisions regarding material events and information disclosure.

Compliance Requirements

  • Listed companies must disclose acquisition or sale of shares in subsidiary companies as per Regulation 30(2) of LODR Regulations
  • Changes in shareholding percentage above prescribed limits must be disclosed timely
  • Disclosures must comply with Para-A of Part-A to Schedule III of LODR Regulations regarding material events
  • Companies must maintain proper disclosure mechanisms for transactions involving unlisted subsidiaries

Important Dates

  • Violation Period: October 2017 to December 2022
  • Initial AO Appointment: June 03, 2025
  • Show Cause Notice Issued: July 08, 2025
  • AO Transfer/Reassignment: September 19, 2025
  • Order Date: January 14, 2026

Impact Assessment

Company-Specific Impact: Yash Chemex Limited faces regulatory scrutiny and potential monetary penalty under Section 15A(b) of SEBI Act for multi-year disclosure failures. The order highlights enforcement of subsidiary transaction disclosure norms.

Market Impact: Limited direct market impact as this is an entity-specific enforcement action. However, it serves as a reminder to listed companies about strict compliance requirements for disclosing material events, particularly transactions involving unlisted subsidiaries and changes in shareholding patterns.

Compliance Signal: The order reinforces SEBI’s focus on timely and accurate disclosure of material events, especially involving related party transactions and subsidiary shareholding changes. Companies should review their disclosure processes to ensure compliance with LODR Regulation 30 requirements.

Impact Justification

Adjudication order for disclosure violations related to subsidiary shareholding transactions. Medium impact as it involves historical non-compliance by a specific listed entity rather than broad market-wide regulatory changes.