HUDCO : Regulatory Non-Compliance and Fines

DHARMESH BHATT (Research Analyst) SEBI Registration No. INH000009685

Housing and Urban Development Corporation Limited (HUDCO) has received notices from both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) levying total fines amounting to ₹11,71,740 (inclusive of 18% GST) for non-compliance with various provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the quarter ended June 30, 2026. - Highlights for Investors - *Penalties Levied: Total fines of ₹11,71,740 (inclusive of GST) have been imposed by NSE and BSE for lapses during the quarter ended June 30, 2026. *Core Areas of Non-Compliance: Lapses primarily involve structural requirements concerning board composition and committees under SEBI LODR Regulations: *Regulation 17(1) & (1A): Board composition and non-executive director requirements (Fine: ₹4,55,000). Regulation 18(1): Audit Committee constitution (Fine: ₹2,00,600). Regulation 19(1)/19(2): Nomination and Remuneration Committee constitution (Fine: ₹2,00,600). *Regulation 20(2)/(2A) & 21(2): Stakeholder Relationship Committee and Risk Management Committee constitution (Fine: ₹1,10,920 each). *Regulation 17(2A): Quorum requirements for Board meetings (Fine: ₹11,800). Company's Defense and Rationale: HUDCO has clarified that as a Government of India enterprise, the power to appoint directors—including independent directors—rests entirely with the President of India through the administrative ministry. Because director appointments are outside the company's direct control, management is pursuing a formal waiver of the penalties. * Board Action: The Board has formally reviewed the penalties, mandated continuous follow-up with the government ministry, and directed management to apply for a waiver from the stock exchanges.