On Thursday 9th September 2021, Caf Coffee Day filed an application dated February 18 this year for settlement under the SEBI (Settlement Proceedings) Regulations, 2018, following issuance of show cause notice to the company.
The allegations against the company were that in the meetings dated November 13, 2019 and January 29, 2020 wherein the financial results for the quarters ending June 30, 2019 and September 30, 2019 were approved, respectively, no limited review report was placed before the board of directors.
Further, the company submitted unaudited financial results for the quarters ending June 30, 2019 and September 30, 2019, but the same were not subjected to limited review by its statutory auditors.
"Noticee was, therefore, alleged to be in violation of Regulations 33(3)(c)(i) and 33(3)(h) of LODR Regulations," SEBI in its notice had stated.
Another allegation was that on January 23, 2020, the company had disclosed to the stock exchanges that they entered into the Definitive Agreement to sell Way2Wealth Securities Private Ltd, including its certain subsidiaries, to Shriram Ownership Trust, subject to the closing conditions and required statutory approvals.
However the settelement order said that '' the details of sale of Way2Wealth as stipulated in the SEBI circular No CIR/CFD/CMD/4/2015 dated September 9, 2015 were not disclosed by the company". On enquiry, the company which runs the Cafe Coffee Day chain claimed that the details of sale of Way2Wealth were emailed to stock exchange on January 31, 2020. However, NSE clarified that the company did not file the details on the dedicated NEAPS portal of filing for dissemination.
The company informed that it uploaded the details of sale of Way2Wealth to the stock exchanges on August 31, 2020 and the same was not uploaded earlier as the company was about to intimate on it after getting final approvals from the statutory regulators and completion of sale process.
Finally on Thursday 9th September 2021, the SEBI order said that post the settlement the pending adjudication proceedings initiated against Coffee Day Enterprises Ltd. has been disposed of as "Coffee Day Enterprises Ltd made a payment of Rs 69,06,250 towards settlement amount by way RTGS Fund transfer on August 27, 2021 as per the settlement terms approved by the Panel of Whole Time Members."
Hence, Coffee Day Enterprises has paid Rs. 69 lakh to settle a case, pertaining to alleged disclosure norm violations, with the Securities and Exchange Board of India (SEBI).
Case Title:SECURITIES AND EXCHANGE BOARD OF INDIA(SEBI) V.CAFE COFFE DAY ENTERPRISES.
