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The Supreme Court has dismissed appeals by promoter of erstwhile Bank of Rajasthan (BoR) and its associates challenging penal orders passed by the Securities and Exchange Board of India (Sebi).
The bench of Ranjan Gogoi and Abhay Manohar Sapre found no grounds to interfere with the orders and imposed costs.
"We do not see how any interference can be made with the penalty imposed. We, therefore, dismiss all the appeals holding that no substantial question of law arises which would require an authoritative pronouncement of this Court. The appellants shall deposit the penalty amount along with costs quantified at Rs.5,00,000/- (Rupees five lakhs only) each, with the SEBI forthwith and in any case within two weeks from today," the bench said in an order earlier this week.
The matter pertains to the alleged violation of takeover norms by Tayals in BoR through numerous entities. The joint probe by Sebi and the Reserve Bank of India eventually led to the merger of the bank with ICICI Bank. In 2013, Sebi had slapped a penalty of Rs 30 crore on some 118 entities including the promoters. A year later, the Securities Appellate Tribunal upheld the penalty of Rs 4 crore each on BoR's promoters — Sanjay Kumar Tayal and Pravin Kumar Tayal. In separate orders it also upheld orders against other entities.
Tayals raised the question before the Supreme Court whether the finding with regard to the alleged actions jointly with persons acting in concert (for short, "PAC") would be sufficient to sustain the liability of the appellants in law.
The funding of these two groups for acquisitions of additional shares from the market and the book transactions which were effected as against the off-market transfers made would itself indicate that all the entities i.e. Tayal Family, the promoter group, the Tayal Group, the Yadav Group of Companies and the Silvassa Group of Companies were acting in concert to the detriment of the interest of the investors and the securities market, the bench held.
