Tata Motors Finance settles NCD issue case with SEBI for Rs 32 lakh

Tata Motors Finance settles NCD issue case with SEBI for Rs 32 lakh

Tata Motors Finance has settled the enforcement proceedings issue with market regulator Securities and Exchange Board of India (SEBI). Company had filed a suo-motu settlement application over alleged violations related to issuance of non-convertible debentures (NCDs).

The case pertains to five issuances of Tier II perpetual NCDs made by TMFL between November 2019 and July 2022 on a private placement basis. SEBI observed that although the issuances were structured as private placements, the NCDs were subsequently down-sold to more than 200 investors within six months of allotment. This triggered the deeming provision under securities law, classifying the issuances as public issues.

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SEBI held that the company had prima facie violated provisions of the Companies Act, 2013, the SEBI Non-Convertible Securities Regulations, 2021, and the SEBI (Issue and Listing of Debt Securities) Regulations, 2008.

TMFL sought settlement under the SEBI (Settlement Proceedings) Regulations, 2018, without admitting or denying the findings. After deliberations by SEBI’s Internal Committee and the High-Powered Advisory Committee, the settlement terms were approved by a panel of Whole Time Members comprising Amarjeet Singh and Sandip Pradhan.

Under the settlement, TMFL paid Rs 32 lakh, following which SEBI agreed not to initiate enforcement action for the stated violations. However, the order preserves SEBI’s right to reopen proceedings if any misrepresentation, breach of settlement conditions, or payment discrepancies are discovered.

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