 "The logo of the Securities and Exchange Board of India (SEBI), India's market regulator, is seen on the facade of its head office building in Mumbai")
The Securities Appellate Tribunal (SAT) on Friday came down heavily against an unnamed whole-time member of the Securities and Exchange Board of India (Sebi) in an appeal filed by Adventz Finance.
“This appeal reveals the shoddy manner in which the directions of this tribunal are dealt with by the WTM of Sebi,” said SAT directing the securities market regulator to pay Rs 1 lakh to the appellant within a week.
“Since we are distressed with the manner in which the WTM of Sebi has discharged his quasi-judicial duties which is highly detrimental to the interests of the securities market, we direct the registry to forward a copy of this order to the Finance Minister and also to the Chairman of Sebi for information,” said the tribunal in an order.
On May 6, SAT had disposed of two appeals after Sebi counsel told the tribunal that representations made by the appellants would be heard and disposed of within seven weeks. One Sebi member gave a hearing opportunity to the appellant, however, didn’t pass an order even as SAT’s seven-week deadline ended on June 24. Nor did the member seek an extension from SAT for passing the order. Later, when the appeal once again came before SAT on July 12, Sebi counsel sought an oral explanation, which was rejected by the tribunal.
What irked the tribunal, was a letter tendered by Sebi counsel which had reasons for rejection of representation made by Adventz signed by WTM. However, on perusal, “it was seen that it was not an order passed by the WTM of SEBI but only a communication issued by the chief general manager of Sebi recording the gist of the order allegedly passed by the WTM of Sebi,” SAT said.
“…It is evident that the WTM of Sebi permitted the chief general manager to issue a letter to the appellant that the representation made by the appellant has already been disposed of by the WTM of Sebi, when in fact no order was passed by the WTM of Sebi,” the tribunal added.
The SAT order further said, “If for any administrative constraints it was not possible to pass an order within the stipulated time, then the WTM of Sebi ought to have sought extension of time, which the WTM of Sebi has failed to do. Instead, the WTM of Sebi resorted to a totally impermissible mode of representing that an order has been passed when in fact no order was passed by him. In such a case, informing the party that an order disposing of the representation is already passed, without actually passing an order, is nothing but an attempt to mislead in the matter. We strongly condemn the irresponsible approach adopted in the matter.”
