SEBI recently imposed a penalty of Rs 50 lakh on seven promoter entities of Hindustan Unilever Limited for their delayed filing of continual disclosures required under the takeover regulations of 1997 and 2011. The delays ranged from 4 to 31 days. While the promoters contended that the delays were inadvertent and without any intention to conceal any information or gain any advantage, the Adjudicating Officer of SEBI observed that once violation of statutory obligations is established, the intention of the violator becomes irrelevant and imposition of penalty becomes essential. While this order reiterates the importance of timely disclosure and indicates SEBI's stand of placing interests of investors at the core of securities market regulation, the amount of penalty appears disproportionate.

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Date:September 28, 2015