Deepak Parekh, non-executive chairman of HDFC
Deepak Parekh, non-executive chairman of HDFC
File Photo

Mortgage lender HDFC Ltd's Chairman Deepak Parekh has settled with markets regulator Sebi a matter of non-compliance with an erstwhile listing agreement.

Parekh has settled the matter by paying Rs 9.37 lakh towards settlement charges without "admitting or denying the findings of fact and conclusions of law".

The matter pertains to non-compliance with the erstwhile listing agreement by Parekh with respect to an Inter-Corporate Deposit (ICD) advanced by HDFC Ltd to Gliders Buildcon Realtors Pvt Ltd, a group company of Piramal Realty Pvt Ltd.

According to an examination by Sebi, apart from the ICD, an additional loan facility of Rs 875 crore was approved to Gilders Buildcon in December 2014. Based on a request from Gliders Buildcon, the outstanding ICD was converted into a loan facility of Rs 750 crore without any additional disbursement.

Parekh was HDFC Ltd Chairman and a member of the committee which approved the ICD/ loan. He was also part of the advisory board of Piramal Group, including Piramal Realty, for which he received fees for advisory services given to the group for the calendar years 2011 to 2015 and financial years 2017 and 2018, as per a Sebi order.

The regulator noted that HDFC Ltd has adopted a Code of Conduct for all its directors and senior management personnel as per the erstwhile listing agreement. However, Parekh failed to comply with the Code of Conduct of HDFC Ltd, resulting in violation of the erstwhile listing agreement.

In view of the non-compliance, Sebi issued a 'Summary Settlement Notice' on December 4, 2020 to Parekh intimating thereby that the proceedings (to be initiated), may be settled and disposed of upon filing of a settlement application along with remittance of Rs 9,37,500 to Sebi within 30 calendar days of receiving the notice.

Responding to the notice, Parekh filed an application for settlement proposing to settle the defaults without admitting or denying the findings of fact and conclusions of law, through a settlement order and remitted the amount on December 24, 2020.

Passing the order, Sebi's Whole Time Members -- S K Mohanty and Ananta Barua -- said the proposed proceedings to be initiated for the default are "settled qua the applicant". The settlement is subject to various terms, including that the regulator shall not initiate any enforcement action against the applicant for the said default.

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Free Press Journal