Suspension of trading in listed entity’s securities doesn’t entitle Co. not to pay annual listing fee to exchanges: SAT

Case Details: Enchante Jewellery Ltd. v. BSE Ltd. - [2022] 140 taxmann.com 631 (SAT-Mumbai)

Judiciary and Counsel Details

• • Justice Tarun Agarwala, Presiding Officer & M.T. Joshi, Judicial Member
  • Gautam Tiwari & Tasneem Khatau, Advocates for the Appellant.
  • Tomu Francis & Ms Zarnaab Aswad, Advocates for the Respondent.

Facts of the Case

The trading of shares of the appellant company was suspended by the respondent exchange. The appellant made numerous representations to the exchange for revocation of its suspension. In response, the respondent through various letters directed appellant to complete the formalities with regard to revocation of suspension failing which the exchange would proceed to compulsory delist the appellant company.

Since various formalities were not been completed a show cause notice was issued to show cause why the company should not be compulsorily deregistered on account of the appellant’s failure to complete the compliances for revocation of suspension.

Since the compliances were not made the impugned order was passed by the Delisting Committee of the BSE wherein the company was granted 30 days time to submit all pending compliances including payment of all outstanding exchanges dues and to complete the formalities for revocation of suspension of securities of the company as communicated by the Exchange failing which compulsory delisting against the company would be proceeded with in terms of the show cause notice.

SAT Held

The SAT held that an entity listed on Stock Exchange platform is required to make payment of requisite annual listing fees till time securities are listed on platform of exchange, failing while exchange can suspend trading in listed entity’s securities and such suspension can be revoked subject to payment of annual listing fees as well as prescribed reinstatement fees.

Suspension of trading of securities of listed company does not entitle company not to pay annual listing fee. Under listing agreement listed company is duty bound to pay annual listing fee till such time securities are listed on platform of exchange.