Sebi serves new show cause notice to Tata Motors in 2001 fraud case

In June 2018, the Securities App­ellate Tribunal had rapped Sebi for letting off TFL even after investigation clearly showed substantial breach of securities law

The Securities and Exchange Board of India (Sebi) has served a new show cause notice (SCN) to Tata Motors and its top management in an 18-year-old case involving erstwhile Tata Finance (TFL) on fraudulent and unfair trade practices affecting four companies (including Infosys). 

In June 2018, the Securities App­ellate Tribunal (SAT) had rapped Sebi for letting off TFL even after investiga­tion clearly showed substantial breach of securities law, via false declarations in the draft document of a 2001 rights issue of convertible preference shares. 

“The notice has been served in January under Section 11 and 11B of the Sebi Act,