BSE Ltd, vide email communication dated 29-05-2025, imposed fine of Rs.11,68,200/- on the Corporation for non-compliance with corporate governance requirements, intimation of which is attached.
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BSE has imposed a total fine of Rs. 11,68,200 (including GST) on Gujarat State Financial Corporation for non-compliance with SEBI's corporate governance requirements for the quarter ended March 31, 2025. The penalty covers four areas: composition of the Board of Directors (Rs. 5,31,000), Audit Committee (Rs. 2,12,400), Nomination and Remuneration Committee (Rs. 2,12,400), and Stakeholders Relationship Committee (Rs. 2,12,400). The non-compliance stems from the absence of Independent Directors on the Board and its committees. The Corporation explains that the State Financial Corporations Act, 1951 does not permit appointment of Independent Directors, and although it was previously exempt under SEBI LODR Regulation 15(2)(b), that exemption was removed from September 1, 2021. The Corporation has been pursuing amendments to the SFCs Act with the government and has requested BSE to waive the fine until the Act is amended.
This is a recurring penalty the Corporation has been receiving in previous quarters, so the financial impact is minimal (about Rs. 11.68 lakh). The issue is structural and unlikely to affect the stock price significantly, as it stems from a conflict between the governing SFCs Act and SEBI's listing rules, with the Corporation actively seeking legislative resolution.