Tata Motors Finance Settles NCD Issuance Case With Sebi After Paying ₹32 Lakh

New Delhi, Dec 23: Tata Motors Finance Ltd on Tuesday settled with the capital markets regulator Sebi a case pertaining to alleged violations in the issuance of non-convertible debentures, after paying a settlement amount of Rs 32 lakh.

Tata Motors Finance Ltd (TMFL/Applicant) filed a suo-motu settlement application with the Securities and Exchange Board of India (Sebi), by proposing to settle by neither "admitting nor denying the findings of facts and conclusions of law", Sebi said in the order.

Case Linked To Tier II Perpetual NCD Issuances

The case pertains to five issuances of Tier II perpetual non-convertible debentures (NCDs) by Tata Motors Finance Ltd on a private placement basis between November 2019 and July 2022. The NCDs also included unlisted issuances worth Rs 460 crore.

Issue Deemed As Public Offer

According to Sebi, the NCDs were sold to more than 200 investors within six months, from the date of the allotment.

Thus, the issuance of these NCDs by the TMFL is deemed to be a public issue and is in violation of the provisions of the Companies Act, 2013, Sebi's (Issue and Listing of Non-Convertible Securities) regulations and (Issue and Listing of Debt Securities) rules.

Revised Settlement Terms Approved

Following the settlement application, TMFL filed revised settlement terms which were approved by Sebi. Accordingly, Tata Motors Finance Ltd remitted the amount and settled the matter.

No Enforcement Action, With Riders

"... it is hereby ordered that any proceedings that may be initiated for the violations ..., are settled in respect of the applicant (TMFL)," Sebi's Whole Time Members Amarjeet Singh and Sandip Pradhan said in the order.

Further, the regulator said it will not initiate enforcement action against Tata Motors Finance Ltd for the violations covered under the settlement.

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However, the regulator clarified that it retains the right to take appropriate action in future, if any representation made during the settlement proceedings is found to be untrue, or if the company breaches the settlement conditions.

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