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2014 (1) TMI 1652 - AT - Companies LawPenalty for violation of various provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 - Off market transactions - Powers of SEBI - Held that:- During the enquiry, it has been categorically found that appellant nos. 1 to 6 have a common address and two common directors. In this backdrop, Shri Joby Mathew, learned counsel for appellant nos. 1 to 6 has admitted the connection among appellant nos. 1 to 6 and, rightly so. As far as remaining appellants and / or Noticees are concerned, it is not disputed that a large quantity of shares of the same company i.e. RUNL was received by way of off-market transactions by them from appellant nos. 1 to 6. It is also borne out of the records that the remaining appellants and / or Noticees sold shares by way of synchronized trades to appellant nos. 1 to 6, mostly on the same day or immediately thereafter within a few days. Nobody has disputed these transactions either before us or before the learned AO. Such reversal of the off-market transactions in a quick succession through synchronized on-market transactions to the same set of entities in almost similar fashion within a very short span of time clearly points out that all the entities are connected to each other in some way. We hold that the story advanced by the appellant nos. 1 to 6 regarding borrowing of loan from entities no. 7 to 21 is misconceived, untenable on facts and hence rejected.In view of the above discussion of law and facts, we do not find any merit in the case of the appellants and the appeals are liable to be dismissed. Powers of SEBI - SEBI as Regulator has ample powers and discretion to take a subjective decision in respect of certain entities on the basis of availability of sufficient evidence against them. At the same time, SEBI is also empowered to take a subjective decision, in a given case, not to take or even drop action against certain other entities in the same case if it is satisfied, on the basis of material on record, that there is insufficient, weak or no evidence to finally bring such entities to the book. In such an eventuality, SEBI may decide not to take any action against such entities. - Decided against the appellants.
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