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SEBI - Tribunal - Case Laws
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- 2020 (1) TMI 524 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Mis-utilised public issue proceeds contrary to the stated intent of investment in the company's subsidiary and augmenting the company's working capital - violating the provisions of Regulation 57 (1), Clause (XV10)(2) of Part A of Schedule VIII and regulation 60(4) of SEBI (Issuance of Capital & Disclosure Requirements) Regulations 2009 ("ICDR Regulations") read with Section 12A(a), (b) and (c) of the SEBI Act, 1992 and; regulations 3(b)(c)(d), regulations 4(1) and 4(2)(f), (k) and (r) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations 2003 ("PFUTP Regulations") - Whether IGSL made false statements in its RHP and prospectus with respect to raising bridge loans? - Whether IGSL failed to disclose acceptance of deposits under Section 58A of the Compani....... + More
- 2020 (1) TMI 523 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Ex-parte ad-interim order passed by the Whole Time Member ("WTM") of SEBI - HELD THAT:- SEBI has power to pass ex-parte ad-interim order pending investigation under Sections 11 & 11B of the SEBI Act. What has been disputed is, that considering the facts and circumstances in the instant case, there was no urgency to pass an ex-parte ad-interim order. There is no doubt that an ex-parte ad-interim order can be passed only when there is an urgency. In Liberty Oil Mills v. Union of India [1984 (5) TMI 236 - SUPREME COURT], the Supreme Court held that the urgency must be infused by a host of circumstances and further held that the regulatory agency must move quickly in order to curb further mischief and take action immediately in order to instill and restore confidence in the capital market. There is no doubt that only under emerg....... + More
- 2020 (1) TMI 377 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Non compliance of various provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 - Penalty imposed - HELD THAT:- The appellant has violated various provisions of the Listing Regulations. The limited prayer made before us was that due to unforeseen events, the stock exchange should have taken the events as a mitigating factor to waive or reduce the quantum of penalty. In this regard, we find that the exceptions carved out in the circular dated May 3, 2018 relates to certain events which in the instant case was not existing. Further, we find that there no justification or any reason has been given as to why a Company Secretary and the two independent directors could not be appointed. In the absence of any cogent reasons, we do not find any justification to reduce the quantum of penalty.
- 2020 (1) TMI 368 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Non-disclosure of the 'rejection' of Forest Clearance ("FC" for convenience) by the Ministry of Environment and Forests ("MoEF" for convenience) on an application for iron ore mining filed by ECL was material to an Initial Public Offer ("IPO" for convenience) made by ESL and for disclosure under Clause 36 of the Listing Agreement for ECL - HELD THAT:- In the row relating to Environmental Clearance what is indicated in the above table is that the approving authority for both in respect of coking coal mining and iron ore mining is the MoEF; approval in respect of coking coal mining has been received and approval in respect of iron ore has been received, but applicable once forest clearance is received. When this statement was published as part of the prospectus the 04.10/11.2008 rejection letter of the ....... + More
- 2020 (1) TMI 366 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Ad-interim ex-parte order - appellants Restrained from accessing the securities market - violation of PFUTP Regulations 2003 - related party/related party transactions - Finding of manipulation of the books of account or misrepresentation of financials or diversion/siphoning off the funds of the Company - HELD THAT:- We are unable to fathom why the explanations provided by the appellant both relating to the basic facts on the proposed merger and its failure was not given sufficient consideration in the impugned order particularly because of the given business model of Tree House. Tree House is operating in the area of education both for running its own schools, through franchise system and/or by providing funds to various trusts. If that business is adversely affected due to unfavourable business environment obviously that would be a fact....... + More
- 2020 (1) TMI 365 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Delayed disclosure of material informations as required under Clause 36 of Listing Agreement read with Section 21 of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as, "SCRA'') and trading in the scrip of appellant - Washington Warning, China Announcement - HELD THAT:- It is to be noted that while having the negative information of slapping of the warning, the appellant sold shares of Jubilant Life Sciences on February 25, 2013. His explanation for the same is that he required funds for renovation of his house is not substantiated by any material on record. As argued before us that for penalizing a person for insider trading, SEBI has to establish that the appellant has traded "on the basis of" the unpublished price sensitive information as provided by Section 15G of the SEBI Act as quoted ....... + More
- 2019 (12) TMI 1271 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Infringement of Rights of the appellant as a bonafide lender - Depositories shall not allow transfer of securities from DP account - HELD THAT:- The impugned order notes that Karvy had raised funds pledging securities from banks and NBFCs and therefore was aware that rights of those entities would be impacted by the said order. As such, even if they could not be heard while passing the impugned order atleast on their representation they were entitled to be heard. It is on record that the appellant wrote to SEBI on November 23, 2019 (received by SEBI on November 25, 2019, 23rd and 24th being Saturday and Sunday). It is also an undisputed fact that lending against securities is a normal and permitted business activity of banks and NBFCs and SEBI is fully aware of the same. Therefore, we are of the considered view that the impugned order has....... + More
- 2019 (12) TMI 1150 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Order of the Whole Time Member ("WTM") of SEBI restraining appellants from accessing the securities market directly or indirectly for a period of 10 years - direction to refund the investors/clients money with interest at the rate of 15% per annum from the date when the repayment became due till the date of actual payment - HELD THAT:- The appellant is a promoter and therefore by virtue of holding majority stake of more than 51% she is in control of Kassa. Therefore, we find no lacuna in the impugned order in holding the appellant guilty of the various provisions specified therein and the consequent directions issued thereunder. A common submission made by four of the appellants (excluding Manoj Kumar Agrawal) is that the impugned order does not crystallize the amount to be repaid/refunded to investors/clients and when the princ....... + More
- 2019 (12) TMI 1144 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Legality and veracity of the order passed by Forward Markets Commission which has now merged with the Securities and Exchange Board of India ('SEBI' ) - Appellant no. 1 challenged the show cause notice before the Gujarat High Court contending that no show cause notice was provided nor an opportunity of hearing was given - HELD THAT:- Admittedly the show cause notice was issued on June 21, 2011 which was received by appellant no. 2 shortly thereafter. The documents in part were only supplied on July 5, 2011. Accordingly, the appellant no. 2 cannot be faulted for the adjournment made on July 4, 2011. According to the appellant voluminous documents running into thousands of pages were provided and many documents were not provided for which further request was made which was rejected by the respondent. Request for further time to plac....... + More
- 2019 (12) TMI 1143 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Order of delisting - denial on the part of the delisting committee in order to enable the appellant to be represented by an Advocate - No Adequate and reasonable opportunity of being heard provided - HELD THAT:- We find that the show cause notice was issued on 1st June, 2018. The first date of hearing before the delisting committee was fixed on 26th June, 2018. The request for adjournment was only made for 26th June, 2018. The denial on the part of the delisting committee in order to enable the appellant to be represented by an Advocate is against the settled principles of natural justice. Further, we find that it was the first date of hearing and there is no allegation that undue adjournment was sought by the appellant. Adequate and reasonable opportunity of being heard was not provided to the appellant. The impugned order is thus violat....... + More
- 2019 (12) TMI 1142 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Decision of the Disciplinary Action Committee ("DAC" ) of the National Stock Exchange of India Limited ("NSE") - DAC has passed several directions including consolidated monetary penalty of ₹ 37.89 lakhs, suspension of membership and review by an independent auditor appointed by the Exchange to confirm that the appellant is complying with all the regulatory guidelines as well as adequacy of the internal controls in place - HELD THAT:- Although the DAC has found some deficiencies in the claim of the appellant that his relatives had excess margin in their accounts the issue is not conclusively settled. Accordingly, appellant deserves benefit of doubt. Moreover, it is an established principle in law that when there are two provisions in law the more beneficial provision should be applied wherever appropriate. This i....... + More
- 2019 (12) TMI 946 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Recovery certificates/attachment notices/orders issued by the concerned authority in SEBI - SEBI held that the scheme mooted by the appellant was a CIS and directed that the contributions made to the scheme must be returned - proof of refund of money to the investors in full or refund in the form of land with full transfer of ownership and all rights - HELD THAT:- This Tribunal had given ample opportunities to the appellant to prove the veracity of their statements with documents before SEBI. The appellant is not able to prove that. Therefore, just making bold statements with part documentation by which no conclusion can be reached do not prove refund of money to the investors in full or refund in the form of land with full transfer of ownership and all rights. We also note that the impugned orders dated August 12, 2016 and September 14, ....... + More
- 2019 (12) TMI 732 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Recovery proceedings continued against the legal representative of the deceased - HELD THAT:- Proceedings would continue against the legal representative of the defaulter if the defaulter dies after the certificate was drawn up by the tax recovery officer. At the outset, Rule 85 is not applicable as we have already held that Section 28A is not applicable. In any case, in the instant case, recovery certificate was drawn on June 15, 2016 much after the death of the appellant's husband who died on November 5, 2015. The recovery certificate and the attachment proceedings was done against a dead person which was without jurisdiction. Once the person dies, recovery proceedings cannot continue and can only continue against the legal representatives if the Statute provides specifically. SEBI Act and its Regulations does not contain any provis....... + More
- 2019 (12) TMI 481 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Powers of Whole Time Member (‘WTM’) of Securities and Exchange Board of India (‘SEBI’) - order of debarment - restraining the appellants from accessing the securities market and further prohibiting them from buying, selling or otherwise dealing in securities, directly or indirectly, or from being associated with the securities market in any manner, whatsoever, for a period of three years from the date of the order - contentions of the appellants are that the WTM committed a manifest error in holding that the appellants were guilty in manipulating the price of the scrips pursuant to the preferential allotment - HELD THAT:- Order of debarment as per the impugned order is of three years. These three years have already been undergone by the appellant pursuant to the impugned ex parte order dated December 19, 2014 restr....... + More
- 2019 (12) TMI 480 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Default by company to refund the amount collected under the Collective Investment Schemes ("CIS") - officer in default - vicarious liability of a peson who was a director only for 50 days - HELD THAT:- If a company is liable to refund the monies received from the investors and if the company fails to pay the amount then the amount can be recovered jointly and severally from every Director of the Company who is an officer in default. Therefore, when the company is the offender, the vicarious liability of the acts of the Directors cannot be computed automatically. The contention that being a Director of the Company the appellant cannot disown his responsibility for the acts of the Company is misconceived. It is not possible to lay down any hard and fast rule as to when a Director would be vicariously responsible for the acts as a ....... + More
- 2019 (12) TMI 477 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Pledging/misuse of client securities by the stock broker - violations of the Securities Laws - HELD THAT:- The securities lying in the aforesaid DP account actually belong to the clients which are the legitimate owners of the securities. Therefore, KSBL did not have any legal right to create any kind of pledge on these securities. Even if the client securities were pledged, it should have only been for meeting the obligation of the respective clients which was not observed in this case. Considering the issue of misuse of clients’ securities by KSBL in unauthorized manner, for its own use and purposely not disclosing the DP account no. 11458979, named KARVY STOCK BROKING LTD (BSE) to the Exchanges in their reporting create a serious doubt on the conduct and integrity of KSBL. The acts of KSBL are prima facie in violation of Stock Bro....... + More
- 2019 (12) TMI 190 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Ex-parte ad-interim order - preliminary report given by National Stock Exchange of India Limited, the Whole Time Member (“WTM”) issued an ex-parte ad interim order restraining the appellant from taking new clients in respect of its stock broking activities and also prevented the appellant from using the “power of attorney” given by its clients - HELD THAT:- Since a clarification has been sought by the appellant we deem it fit and proper that the WTM should look into this aspect and pass appropriate order after giving an opportunity of hearing to the appellant. We accordingly dispose of this appeal at this stage with a direction to the WTM to consider the request of the appellant which has been made vide letters dated November 24, 25 and 26, 2019 and pass an appropriate order after giving an opportunity of hearing by December 02, 2019.
- 2019 (12) TMI 189 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Multiple trades on the same day - fraudulent and unfair trade - violation of PFUTP Regulations - Self trades or wash trades are trades without any change in beneficial ownership - HELD THAT:- On many of the days the appellant has bought and sold the shares and on some of those days the quantities bought and sold also matched. However, there were also several days on which there was only either a buy trade or a sell trade. Generally, only when trades placed by the same party are matched within a short period of time it can be categorized as self trades. Here, it is on record that the appellant did not do multiple trades on the same day. There are a few days when both buy and sell orders of the same quantity were placed. Even on those days when perfect matching is noticed there is nothing on record to show that those trades were entered wit....... + More
- 2019 (11) TMI 1559 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Unexplained use of funds raised by pledging client securities with NBFCs and Banks - monetary penalty of ₹ 15 lakhs and suspension of trading membership of the appellant from all segments of NSE for 5 days - HELD THAT:- There is sufficient evidence against the appellant to prove that certain violations have been committed by it. The magnitude of money involved is also large in terms of ₹ 19 crores worth of client securities being pledged, acceptance of deposits to the tune of ₹ 21.56 crores and non-settlement of funds belonging to 601 clients etc. However, since the appellant has complied with some of the directions issued by the DAC such as submission of CA Certificate, fulfillment of the networth criteria, we are of the considered view that the penalty imposed on the appellant is disproportionate in the given facts and....... + More
- 2019 (11) TMI 1555 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Fraudulent tradings in the shares - Suspension of certificate of registration of the appellant as a stock broker for a period of three months for violation of the provisions of Sections 12A(a), (b) and (c) of the SEBI Act, 1992 read with regulations 3, 4(1), 4(2)(a), (e) and (g) of the SEBI - "PFUTP Regulations" and regulation 7 read with Clauses A and B(2) of Schedule II (Code of Conduct for Stock Brokers) of the SEBI - "Stock Brokers Regulations" - HELD THAT:- In the present case, there are no allegations that the appellant had indulged in proprietary trades. What is alleged is that the entity was grossly negligent and allowed fraudulent transactions to be carried out by Purshottam Khandelwal and two other violations already noted above. Considering all these facts, in our view, the order of the WTM of SEBI directing....... + More
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