Stock Exchanges Imposes Fine of Rs 28,000 on Adani Enterprises

The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) have imposed fines of Rs 28,000 each on Adani Enterprises, a flagship entity of the Adani Group. This penalty relates to non-compliance with Sebi listing rules concerning the appointment of directors.

According to Sebi rules, listed entities cannot appoint a non-executive director who has reached the age of 75 years unless a special resolution is passed. However, Adani Enterprises argues that they obtained shareholder approval in accordance with the applicable laws. They reference the case of Nectar Life Sciences vs. Sebi, where it was observed that the word “unless” in the rule does not imply “prior approval’ and a special resolution is not a mandatory condition for director appointment.

Adani Enterprises also points to Sebi listing regulations 17(1A) and 17(1C), which do not explicitly require “prior approval” for appointments or reappointments. These regulations allow companies to regularize appointments/reappointments at the next general meeting or within three months whichever is earlier.

The company is in the process of submitting applications to NSE and BSE justifying their compliance with Sebi listing regulations and requesting a waiver of the fines imposed.

Adani Enterprises insists that the legislative intent is clear: prior approval is not necessary for such appointments/reappointments and therefore there is no noncompliance with Sebi listing rules. On Tuesday, the company’s shares closed 2.09% higher at Rs 2,694.90 on NSE. Despite recovering from earlier setbacks, the stock remains down by nearly 30% year to date.