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CS Executive · Capital Market and Securities Laws · Listing Obligations and Disclosure Requirements

Sagar Foods Ltd, a listed company, fails to comply with listing conditions relating to the constitution of its audit committee. Under the SCRA, 1956, which penalty provision applies to the company, and what is its range?

Section 23E of the SCRA, 1956 applies. A company failing to comply with listing conditions is liable to a penalty of not less than five lakh rupees, which may extend to twenty-five crore rupees. Section 15H deals with takeover non-disclosure, not listing breaches.

  1. ASection 23E: penalty of not less than five lakh rupees, extending to twenty-five crore rupeesCorrect
  2. BSection 15H: penalty of not less than ten lakh rupees, extending to twenty-five crore rupees
  3. CSection 17A: repayment of money with interest at fifteen per cent per annum
  4. DSection 21: penalty not exceeding one lakh rupees

Explanation

Section 23E of the SCRA penalises a company that fails to comply with listing conditions or commits a breach thereof, with a penalty of at least five lakh rupees extending to twenty-five crore rupees. Section 15H concerns non-disclosure in acquisitions and takeovers, so it does not apply here.

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