Context:
The Securities and Exchange Board of India (SEBI) has imposed a penalty of ₹10 lakh on Future Retail for disclosure lapses related to material events, particularly regarding arbitration proceedings initiated by Amazon.
Key Highlights:
- Background: In October 2020, Amazon initiated arbitration proceedings against Future Group in the Singapore International Arbitration Centre (SIAC) over concerns related to a scheme of arrangement between Future Group and the Mukesh Ambani Group.
- Sebi’s Findings: SEBI found that Future Retail did not immediately disclose the arbitration proceedings or the interim order passed by SIAC, which would have been crucial information for investors.
- Stock Exchange Intervention: After intervention by the stock exchanges, Future Retail eventually disclosed the interim order and its implications, though SEBI found the initial delay in disclosure to be a violation.
Sebi’s Move to Ease Business for Small and Medium REITs
In a bid to improve the regulatory framework and ease the process for Small and Medium Real Estate Investment Trusts (SM REITs), SEBI has announced new measures to simplify public issue processes and standardise disclosures.
- Standardisation of Disclosures: SEBI has split the draft scheme offer document into two parts:
- Key Information of the Trust (KIT): Includes details about the trust, its investment manager, trustee, and overall structure.
- Key Information of the Scheme (KIS): Contains scheme-specific details, such as assets and investment strategy.
- Objective: These changes aim to make it easier for SM REITs to comply with disclosure norms while ensuring transparency and investor protection.
