SAT asks Sebi to pass final order in Cals case in 8 weeks

The Securities Appellate Tribunal (SAT) has asked Sebi to pass a final order in a matter related to Cals Refineries within a period of eight weeks as assured by the capital market regulator.

    

The case is in respect to alleged market manipulation in trading of global depository receipts (GDRs) -- a financial instrument used to raise capital overseas -- of 7 companies including Cals Refineries.

    

In 2011, based on its preliminary probe, Cals Refineries and other firms were asked by the regulator not to issue shares or any instruments convertible into equity shares or alter their capital structure in any manner till further directions.

   

Cals Refineries had approached SAT alleging that Sebi had not completed its investigation and had not passed a final order in the matter even after expiry of almost two years of passing the interim orders in 2011.

 

In its submissions, Sebi (Securities and Exchange Board of India) said that final order after issuing show cause notice and after hearing Cals Refineries would be passed within a period of eight weeks.

   

The market regulator also assured that it would not seek any extension of time in the matter.

    

"It is made clear that if the respondent (Sebi) fails to issue a show cause notice and pass final order within the time stipulated... Ad-interim order dated September 21, 2011 as also the confirmation order dated December 30, 2011 shall stand vacated against the appellant (Cals Refineries)," SAT said in an order dated August 28.

    

Sebi had in 2009-10 received alerts regarding alleged large scale off-market transactions in shares of Cals Refineries and other companies.

    

The regulator's preliminary probe found that a few foreign institutional investors were cancelling the GDR receipts of the companies and converting them into normal shares to sell in the Indian securities market, to a few selected counterparties.

    

The probe also found that Cals Refineries and the other firms had issued GDRs which were hugely in excess of their existing equity size.

    

In its December 2011 order, Sebi had confirmed its initial restrictions imposed on Cals Refineries and also rejected the firm's request for allowing the issue of GDRs.