Coffee Day Enterprises settles case with SEBI for Rs 69 Lakh

Coffee Day Enterprises paid Rs. 69 lakh to settle a case relating to alleged violations of disclosure norms with the Securities and Exchange Board of India.

After receiving a show cause notice, the company submitted a February 18, 2018 application for settlement under the SEBI Settlement Proceedings Regulations.

One of the accusations against the company was the lack of a limited review report before the board at its meetings of November 13, 2019 & January 29, 2020. This was where the financial results of the quarters ended June 30, 2019 & September 30, 2019, were respectively approved.

The company also submitted unaudited financial statements for the quarters ending June 30, 2019 & September 30, 2019, however, these were not subject to limited review from its statutory auditors.

It stated that the Noticee was, therefore alleged to have violated Regulations 33(3) (c)(i), and 33(3) (h) of LODR Regulations.

Another claim was that the company disclosed to stock exchanges on January 23, 2020 that it had entered into the Definitive Agreement for Way2Wealth Securities Private Ltd to sell Way2Wealth Securities Private Ltd and its subsidiaries to Shriram Ownership Trust. This agreement was subject to closing conditions and required statutory approvals.

The settlement order stated that Way2Wealth did not disclose the details of the sale as required by the SEBI circular No. CIR/CFD/CMD/4/2015, dated September 9, 2015.

The cafe coffee day chain Cafe Coffee Day claimed that Way2Wealth details were sent to the stock exchange on January 31, 2020. NSE clarified however that the details of Way2Wealth’s sale were not filed on the dedicated NEAPS portal for filing for dissemination.

The company then informed the stock exchanges that Way2Wealth was sold. However, Way2Wealth was not yet uploaded to the stock markets. This was because the company was waiting to get final approvals from the statutory regulators before completing the sale process.

It stated that Coffee Day Enterprises Ltd paid Rs 69.06,250 towards the settlement amount via RTGS Fund transfer on Aug 27, 2021 in accordance with the settlement terms approved and confirmed by the Panel of Whole Time Members.

According to the SEBI, the adjudication proceedings against Coffee Day Enterprises Ltd that were pending after the settlement was completed has been concluded.