Bank of Rajasthan shareholders to move HC against Sebi

Sebi's had charged 118 entities of violating the takeover norms by not making requisite disclosures

Minority shareholders in the erstwhile Bank of Rajasthan (merged into ICICI Bank in 2010) will move the Bombay High Court on Friday against the Securities and Exchange Board of India (Sebi), owing to the market regulator’s decision in 2013 to impose a penalty of Rs 30 crore on the bank’s promoters for alleged wrongful gains of about Rs 700 crore, according to a statement by Vinay Kumar Garg, a shareholder. A Sebi spokesperson said the regulator’s adjudicating officer had decided on the monetary penalty.

He added the order was challenged at the Securities Appellate Tribunal, which had set aside penalties in some cases. Penalties were imposed on 118 entities, at an individual level. Separately, a group of about 200 members, represented by lawyer Mridul Sharma, is contesting the appointment of R K Padmanabhan as Sebi’s chief vigilance officer, as he also heads the market regulator’s investigation department. Sebi said historically, the two roles had been played by the same person, adding this was in line with vigilance guidelines.

"All through the history of SEBI, an Executive Director(ED) of a department in SEBI has been given the additional responsibility of the CVO. For eg., immediately before the current CVO, an IPS officer who was the ED in charge of Investigations Department was also working as CVO. Even prior to that similar practices have been followed. Having a part time CVO in an organisation having limited number of officers such as SEBI is as per guidelines and practices approved by Central Vigilance Commission (CVC). However, in view of frequent and motivated attempts to rake up this issue again and again, SEBI has sought further guidance in the matter from the CVC, which is awaited," said the person.