SAT adjourns FPI appeals after Sebi raises maintainability objections

The Securities Appellate Tribunal deferred to August 3 the hearing on appeals by five foreign portfolio investors after Sebi questioned the maintainability of their pleas

The Securities Appellate Tribunal (SAT) on Wednesday adjourned the hearing on pleas filed by five foreign portfolio investors (FPIs) to August 3 following objections raised by the Securities and Exchange Board of India (Sebi) on the maintainability of the applications.

 

The appeals have been filed by LTS Investment Fund, Cresta Fund, Asia Investment Corporation Mauritius, APMS Investment Fund and Albula Investment Fund.

 

The five FPIs were named by the now-defunct short-seller Hindenburg Research in its report on the Adani Group.

 

The FPIs, in their pleas, referred to Rule 4(3) of the Sebi (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995, claiming that it mandates the adjudicating officer to form an opinion on whether a formal inquiry should be held after considering the response of noticees to a show-cause notice.

 

 

Senior counsel for Sebi submitted that the regulator had provided the offshore entities with an extract or a paraphrased version of the opinion after the appeals were filed.

 

“The contention that no reason has been given while framing the opinion is erroneous,” the counsel argued.

 

He added that an opinion formed is not an order and, therefore, the appeals were not maintainable.

 

The offshore entities have sought to amend their appeals, according to legal sources.