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- 2020 (3) TMI 1283 - SECURITIES APPELLATE TRIBUNAL MUMBAI
Violation of Listing Agreement read with Section 21 of the Securities Contracts (Regulation) Act - penalty of ₹ 30 lakh has been imposed on the appellants - HELD THAT:- There is no allegation that the results are not disclosed. Hence the alleged violation is in terms of only some variations which are about 10% of the reported net profits for the financial year 2010- 11. The explanation furnished by the appellants is in terms of mistakes committed in terms of minor heads /sub-heads. Given that, there is no allegation of non reporting and, therefore, the appellants had complied with the mandatory requirement of Clause 41 we give benefit of doubt to the appellants in terms of the explanation provided and do not intend to impose any penalty on this ground. We do not agree with the contention of the appellants as regards inordinate delay....... + More
- 2020 (3) TMI 920 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Money mobilization - money collected by the Company for teak plantation scheme was in the nature of Collective Investment Scheme (CIS) as defined in section 11AA of the Securities and Exchange Board of India Act - scheme was being carried on without requisite registration under the SEBI Act - HELD THAT:- In Appeal No. 378 of 2017 were appointed as directors for a limited period between 2008 and 2009. During this period, no amount was collected under the CIS. There is no finding that the amount collected had matured during the period when these appellants were the directors. Consequently, in our opinion, these directors could not be fastened the liability to refund the amount as they had neither collected the money nor were responsible for disbursement of the money to the investors at that stage. Admittedly the said appellants after their ....... + More
- 2020 (3) TMI 586 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Failure to make the necessary disclosures regarding creation/invocation/release of certain pledge transactions and off-market transactions/purchase of shares in the company - contention of the appellants is that Regulation 29 of the SAST Regulations is not applicable and is only applicable to the pledgee - penalty has been imposed for violation of Regulation 29(2) and 29(3) which provides that an acquirer who holds shares or voting rights entitling them to 5% or more of the shares or voting rights in the target company shall disclose every acquisition or disposal of shares representing 2% or more within two working days - HELD THAT:- Whenever a share which is pledge is invoked meaning thereby the shares are sold, the necessary consequence which follows is the reduction in the shareholding of that particular entity. In the instant case, wh....... + More
- 2020 (3) TMI 573 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Violation of Section 6A(4)(b)(iii) of the Insurance Act, 1938 - transfer of shares made without previous approval of the authority and, therefore, such transfer of shares are null and void ab initio - HELD THAT:- Referring to communication of IRDAI vide their letter dated February 4, 2020 and their reply filed before this Tribunal, it is apparently clear that damage control measures have been adopted by Respondent No. 1 subsequent to the impugned orders dated December 4, 2019 and December 27, 2019. The communication/order of IRDAI dated February 4, 2020 has largely diluted its own order dated December 4, 2019 and December 27, 2019. The stand of the Respondent No. 1 as depicted in paragraph No. 21 of their reply makes is apparently clear that prior to any transfer of the shares in question, the authority is required to be in a position to ....... + More
- 2020 (2) TMI 1002 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Fraudulent and Unfair Trade Practices Relating to Securities Market - Creating artifice/scheme - appellant restrained from dealing in the securities market, directly or indirectly, for a period of five years from the date of the ad-interim ex-parte order - HELD THAT:- An unknown company suspended from trading for long; off-market buying of 1,050 shares of the said company which constitutes more than 2% of its share capital and which is in the name of an unknown person (Kushal Jain) on the recommendation of a person from the native place of the appellant with no prior connection etc. can be treated as only a fiction rather than normal business. Coupled with the finding that the appellant had other transactions off-market with Gromo as given in Table 2 page 13-14 of the impugned order is sufficient evidence to prove the connection between G....... + More
- 2020 (2) TMI 873 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Default in price offered by the acquirers - open offer eligibility - entitlement of all shareholders for receiving interest - offer price made by the acquirers was grossly inadequate as the Target Company GTL had a plot of land worth about ₹ 2000 crore which was not reflected in the said valuation - HELD THAT:- The appellant, instead of emphasizing the relevant facts over-emphasized three valuation reports and the infrequently traded nature of GTL shares in 2018 which has no relevance and sought interest to all shareholders etc. which is untenable. The crux of the matter is simple; whether the price offered by the acquirers and the interest paid thereon to certain shareholders are in consonance with the applicable regulatory provisions and Court orders thereon. Clearly for frequently traded shares Sub Regulation 20(4) is applicable ....... + More
- 2020 (2) TMI 872 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Fraudulent and Unfair Trade Practices relating to Securities Market - Dealing illiquid scrip in order to create artificial volume and market price for vested gain - HELD THAT:- Appellant did not furnish the requisite information to the investigation team. Further, no reply was filed by the appellant pursuant to the show cause notice. Inspite of service of the summons, the appellant failed to appear nor filed any reply to defend himself even though ample opportunity of personal hearing was given. Charge levelled against the appellant remained unreburted. Further, we find that the AO considered the material evidence on record and came to a conclusion that the price payable to the stock exchange pursuant to the default committed by the appellant's client in the delivery of shares was not recovered by the appellant from its client leads t....... + More
- 2020 (2) TMI 871 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Independent director liability in respect of acts of omission or commission by a company - Fraudulent issue of debentures - HELD THAT:- Decision to issue debentures and consequent allotment was made by the company during the period when the appellant had never attended the Board Meeting. The decision making process done by the company was concluded in the absence of the appellant. The appellant had no say in the decision making process made by company and its directors with regard to the issuance of debentures. Thus, the finding of the WTM in paragraph no. 18.4.2 of the impugned order that the appellant was involved in the decision making process relating to the issuance of debentures is factually incorrect and based on surmises and conjectures. The said finding in the light of the aforesaid cannot be sustained. Admittedly, the appellant ....... + More
- 2020 (2) TMI 870 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Non disclosure on transfer of shares - exemption by Regulation 10 of SAST Regulation seeked - appellants' reason that all the transfers were between the group i.e. the husband and wife i.e Appellant no.1 and 2 and their private limited Company i.e. Appellant no.3 - HELD THAT:- What is exempted under this regulation is the obligation to make an open offer. The disclosure requirement is not exempted by this Regulation. It is to be noted that while appellant Bharat Patel holds an independent account. So far as another account is concerned appellant Minal Patel is the first holder of the same alongwith Bharat Patel. The next of the account is of appellant PAT Financial Consultants Pvt. Ltd. which is a private limited Company. As per the reply submitted to SEBI, appellant PAT Financial Consultants Ltd had various shareholders like son and ....... + More
- 2020 (2) TMI 869 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Liability for action in case of default - RTA [Registrar to the Issue and Transfer Agent he appellant] fails to comply with any conditions subject to which registration has been granted or contravenes any of the provisions of the Act, Rules, Regulations or By laws of the Stock Exchange the said RTA shall be dealt with in the manner provided under Chapter V of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 ('Intermediaries Regulations of 2008') - HELD THAT:- The impugned order is harsh and unwarranted. We are of the opinion that there was no real urgency in passing an ex parte ad interim restraint order which virtually amounts to passing a final order especially when a detailed enquiry has been ordered. The respondent is empowered to pass an ex-parte interim order only in extreme urgent cases and that....... + More
- 2020 (2) TMI 868 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Shares acquired through off market transaction - non disclosure of such acquisition under Regulation 13(1) of the PIT Regulations, 1992 - HELD THAT:- Appellant is required to be partly allowed. The observation of the Adjudicating Officer that the appellant has violated the Regulations will have to be accepted. However, the monetary penalty would have to be set aside and the appellant deserves to be let off on warning for the reasons to follow:- 1. The appellant has filed on record at Exhibit 'G' page 98 a copy of the order dated 20th October, 2005 of the Bombay High Court in Company Application No.21 of 2005 in Company Petition No.353 of 2003. It would show that one Company namely Solid Carbide Tools Ltd. was already directed to be wound up. In the said proceedings, the appellant had filed the said application claiming to be a cre....... + More
- 2020 (2) TMI 609 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Fraud scheme of issuance of GDRs - Pledge Agreement and the announcement that the GDRs were successfully subscribed without disclosing the Pledge Agreement to the investors resulted in misleading information to the public and thereby adversely impacting the investors - violation of Section 12A(a), (b), (c) of SEBI Act, 1992 read with Regulations 3(a), (b), (c), (d) and 4(1) of PFUTP Regulations, 2003 - HELD THAT:- Contention in the order that it is a fraudulent scheme created by the appellants along with some other entities cannot be faulted. In this context, it is relevant to note that in our order in the matter of PAN Asia Advisors Limited [2016 (12) TMI 1202 - SECURITIES APPELLATE TRIBUNAL MUMBAI] (Lead Manager) and Vintage (subscriber) whose beneficial owner was Arun Panchariya were all found to be guilty of the violations of Indian S....... + More
- 2020 (2) TMI 538 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Inordinate delay in initiating the proceedings - Self trades and match trades - unfair trade practices - Regulation 3 and 4 of the PFUTP Regulations - penalty under Section 15HA of the SEBI Act - HELD THAT:- Respondent had investigated the scrips of Shree Global Tradefin Ltd. for the period March 1, 2009 to January 10, 2011 in September 2011. Pursuant thereto, a show cause notice dated April 20, 2012 was issued for the violation found during the investigated period March 1, 2009 to November 30, 2009. The respondents thereafter waited for another five years to issue a second show cause notice dated July 20, 2017 for the investigated period April 1, 2010 to January 10, 2011 which had been investigated in September 2011. We find that the respondents were aware of the alleged violation and thus there is no justification for waiting for more t....... + More
- 2020 (2) TMI 436 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Ex parte ad interim order - as directed by WTM of SEBI in the second part of direction no. (iv) the NSDL and NSE were doing their due diligence and in consultation with SEBI effected the transfer of securities to the clients who have paid in full and who were the real beneficial owners of those securities - HELD THAT:- No dispute with the interpretations of the provisions of the Depositories Act and Regulations thereunder. However, while dealing with a case of alleged fraud the implications of the same have to be factored in. The very purpose of an ex parte ad interim order is to deal with the eventualities arising from such alleged fraud or similar major violations. This ex parte ad interim order was issued on [2019 (12) TMI 477 - SECURITIES APPELLATE TRIBUNAL, MUMBAI] . Even an oral mentioning was made by the Appellants before this Trib....... + More
- 2020 (2) TMI 386 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Investments made the appellants individually and collectively crossing the limit of 15% under Regulation 10 of the Takeover Regulations 1997 - obligation on the part of the appellants to make separate public announcements of open offer under Regulation 10 read with Regulation 14(1) for acquiring the shares of the Target Company within four working days from July 24, 2006 ignored - HELD THAT:- Direction of compulsorily delisting was only consequential and contingent upon the happening of certain events as stated in the order of WTM. The contention that the delisting has been ordered since the register of members of the Target Company was compromised is baseless. As held earlier, there is no evidence of tampering with the register of members. The open offer was directed because the promoters were fraudulently trying to transfer shares in th....... + More
- 2020 (2) TMI 105 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Non-listing of an Exclusively Listed Company ("ELC" for convenience) namely Schneider Electric President Systems Ltd. ("Schneider" for convenience) and valuation of its shares - HELD THAT:- Listing is the first option and only in the event of failing to get listed an exit option should be adopted. Further, the guidelines relating to the exit option as provided under the October 10, 2016 Circular at 'Annexure A' lists a number of obligations cast upon the designated stock exchanges as well as on the management of the company to discharge. Nothing on record has been brought before us whether all these steps have been followed or monitored by the concerned stock exchange. What is produced on record by one of the respondents (Metropolitan Stock Exchange of India Limited) is that the appellant-company had never appr....... + More
- 2020 (2) TMI 104 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Valuation of the shares of 'Target Company arising out of open offer for acquisition of 25.02% - HELD THAT:- Having heard all the parties and upon appreciating the ratio of Sultania [2007 (5) TMI 334 - SUPREME COURT] and Cadbury [2014 (5) TMI 1189 - BOMBAY HIGH COURT] according to us, after remand of the matter to the respondent SEBI had rightly obtained the response of the appellant. It has also examined the submission of the intervener i.e. present appellant Chandra Prakash Tripathi. It also sought response from Haribhakti and thereafter made the observation vide the impugned direction. The objection of the appellant that respondent SEBI has merely cut and paste the observation of Haribhakti after the hearing was concluded, though appears to be attractive, the same will have to be repelled for the reasons that Haribhakti has not giv....... + More
- 2020 (1) TMI 716 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Segregation of the funds and securities of client - Regulation Of Transactions Between Clients And Brokers - violation of SEBI circulars dated November 18, 1993 and August 27, 2003 - Penalty imposed - HELD THAT:- There is no violation of circular dated November 18, 1993. The circular itself, inter-alia, provides that withdrawal of money on client authority is permissible. In the present case, money was transferred from the client's accounts to his own account in the commodities market on client's letter of authority. This is against the guidelines provided in the circular dated November 18, 1993 itself, therefore, the order, to that extent is required to be set aside. Transactions allegedly carried out by the appellant contrary to the directions contained in SEBI circular No. MRD/SE/Cir-33/2003/27/08 of August 27, 2003 - The submi....... + More
- 2020 (1) TMI 708 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Pledging of client securities by Karvy by allegedly misutilizing the power of attorney granted by the clients - account frozen explicitly by the WTM of SEBI - appeal filed by Karvy before this Tribunal seeking flexibility in using the power of attorney - maintainability of the appeal - HELD THAT:- Preliminary objection regarding maintainability of the appeal is not sustainable since the appellant is an affected party impacted by all the impugned communications/ orders together which the appeal is also challenging. It is a fact that the appellant as a bank has lent funds to Karvy under a permitted Loan against Shares arrangement and under the Depositories Act, rights and sanctity are provided to such pledged accounts. Therefore, the appellant is an affected party is clearly undisputed. It is also a fact that the appellant was not heard eit....... + More
- 2020 (1) TMI 680 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Penalty u/s 15HA of the SEBI - carrying out the scheme of collective investment scheme without obtaining registration under the SEBI Act - HELD THAT:- Collection so made by the appellants and the other entities was wholly illegal and the decision of the AO that the amount so collected under the collective investment scheme is the illegal profit earned by the appellants and other entities does not suffer from any manifest error of law. The total amount of realization made by the company and its directors amounts to illegal profits made by them. Factors contemplated under Section 15J of the SEBI Act was duly considered. AO found that the whole amount was illegally raised under the collective investment scheme without obtaining registration from SEBI after coming into force of Regulation 4(2)(t) of the PFUTP Regulations, 2003 during the peri....... + More
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