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TMI Blog2017 (8) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... e with Mr. Shyam Mehta, Senior Advocate, Mr. Tomu Francis and Mr. Vivek Shah, Advocates i/b ELP And Mr. Rashid Boatwalla, Advocate with Ms. Rashi Agarwal, Advocate i/b Manilal Kher Ambalal & Co. And Mr. Ajay Khaire, Advocate with Mr. Nair Ranjith Ramesh, Advocate i/b The Law Point And Mr. Ajay Khaire, Advocate with Mr. Nair Ranjith Ramesh, Advocate i/b The Law Point Mr. Rashid Boatwalla, Advocate with Ms. Rashi Agarwal, Advocate i/b Manilal Kher Ambalal & Co. And Mr. Vikram Nankani, Senior Advocate with Mr. Tomu Francis, and Mr. Vivek Shah, Advocate ORDER: 1. These two appeals are filed by the appellants to challenge the communication issued by SEBI on 07.08.2017 to the three stock exchanges viz; Bombay Stock Exchange Limited ("BSE" for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deposit of 200% of trade value shall be collected from the Buyer which shall be retained with Exchanges for a period of five months. b) The shares held by the promoters and directors in such listed companies shall be allowed to be transferred by depositories only upon verification by concerned exchanges and they shall not be allowed to transact in the security except to buy securities in the said listed company until verification of credential/ fundamental by Exchanges is completed. c) Exchanges shall initiate a process of verifying the credentials/fundamental of such companies. Exchanges shall appoint an independent auditor to conduct audit of such listed companies and if necessary, even conduct forensic audit of such companies to v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EBI was referable to Section 11(1) of SEBI Act and hence falls outside the appellate jurisdiction of this Tribunal. 5. In the present case, the directions issued by SEBI to the three exchanges under the impugned communication are:- a) Identify as to whether any of the 331 companies suspected to be the shell companies by the MCA vide its letter dated 09.06.2017 are listed on their exchanges. b) If so, move the securities of those listed companies under Stage VI of GSM with immediate effect so that the said securities are not permitted to trade on daily basis but are permitted to trade once in a month under the trade to trade category. c) No upward price movement in the securities of those companies shall be permitted beyond the last t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants, its promoters and directors would fall in the category of a quasi judicial order and hence appealable before this Tribunal under Section 15T of SEBI Act. 7. It is contended on behalf of SEBI that appeal under Section 15T of SEBI Act is maintainable only against an order passed by the Board or the Adjudicating Officer of SEBI and therefore, the impugned communication issued by the Chief General Manager of SEBI is not appealable under Section 15T of SEBI Act. We see no merit in the above contention, because, it is admitted by counsel for SEBI during the course of arguments that the impugned action was approved by the WTM of SEBI on 28.07.2017 and only thereafter on 07.08.2017 the Chief General Manager has issued the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price rise that is not commensurate with financial health and fundamentals of the company which inter- alia includes factors like earning, book value, fixed assets, net worth, P/E multiple, etc. In the present case, it is neither alleged that there was any abnormal price rise nor the financial health and fundamentals of the company have been gone into by SEBI before issuing the impugned communication. Even BSE and NSE have not investigated as to whether appellants could be considered as shell companies. Counsel for the appellants submitted that the appellants have impeccable track record and their annual turnover in last 3 years is in excess of Rs. 1000 crore and in the last 3 years appellants have paid more than Rs. 100 crore per year as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat if the appellants submit auditor's certificate containing requisite information, then appropriate order would be passed in case of the appellants. 11. During the course of arguments, counsel for SEBI submitted that SEBI would consider the representations made by the appellants either on 09.08.2017 or on 10.08.2017 in the morning. Accordingly, hearing of these appeals were adjourned till 2:15 p.m. on 10.08.107 i.e. today. Counsel for SEBI were called upon to take instruction as to when the letter of MCA dated 09.06.2017 was placed before the Chairman of SEBI or the Board and when decision was taken to issue the impugned communication dated 07.08.2017. 12. Today when both appeals are taken up for hearing it is submitted that the WTM of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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