SEBI Bans Parsvnath Developers From Securities Market For Six Months

Securities and Exchange Board of India has barred Parsvnath Developers Ltd. from the securities market for six months and imposed a penalty of Rs 15 lakh for flouting listing rules.

The company has to pay the fine within 15 days, according to a SEBI order.

According to the markets regulator, Parsvnath Developers failed to make provisions for the outstanding amount in ledger accounts of contractors and sub-contractors, and failed to strictly comply with the Accounting Standards 7, or AS 7, which deals with construction contracts.

"Thus, I find that Parsvnath Developers, to that extent, failed to present a true and fair view of the state of affairs of the company in compliance with the mandate contained in accounting standards and thereby violated provisions of...the erstwhile listing agreement," SEBI's whole-time member Ananta Barua said.

The erstwhile listing agreement cast an obligation on the listed company to abide by certain mandates related to disclosures, corporate processes, corporate governance, etc., and such provisions cast the liability on the listed entity.

"I find that obligation to abide by the erstwhile listing agreement was on PDL and since, the financials of PDL for the period of FY 2009-10 to FY 2011-12, did not represent the true and fair view of the state of affairs of PDL... I find that PDL has violated...the erstwhile listing agreement," he added.

The erstwhile listing agreement is not in force at present, so the violations will be considered listing obligations and disclosure requirements regulations.

Accordingly, "Notice No. 1 (Parsvnath Developers Ltd.) is restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of six months," the regulator said in its order.

This order comes into force with immediate effect, it said.