Team Blitz India
MUMBAI: The Bombay High Court has taken the Securities and Exchange Board of India (Sebi) to task for not complying with its directive. The market regulator had been ordered by the court in October to provide certain probe documents to minority shareholders of New Delhibased company Bharat Nidhi Limited.
The minority shareholders had sent several complaints to Sebi accusing the company of violation of securities laws. When that did not yield any result, they petitioned the Bombay High Court.
The company and Sebi challenged the HC order in Supreme Court which dismissed the appeal in November.
Now the HC has pulled up Sebi for non-compliance of its order. A division bench of Justices G S Kulkarni and Jitendra Jain said that such an approach by SEBI would dent the confidence that investors repose in the public body.
As per Sebi, it had initiated investigations into the case, issued a show cause notice to the company and later passed a settlement order, which was later revoked. The petitioners’ case was that neither the investigation report nor any relevant documents were supplied to them.
They alleged that the investigation done by SEBI was a farce. SEBI’s contention was that since the settlement had been revoked, nothing survived in the petition.
The bench, however, said that there had been “persistent” noncompliance of the order passed by the court and that this was “too far to be imagined and totally unacceptable.”
“Sebi is a public body, it is required to act in public interest, it needs to comply with the orders passed by this court,” HC said. The bench said the petitioners needed to be provided with the documents and directed SEBI to forthwith comply with its order.
“It is quite intriguing to note the approach of Sebi, as clearly seen from the events which had transpired, and from the obstinate stand taken by Sebi in not furnishing the documents to the petitioners,” the HC said. The bench said now that the settlement order had been revoked, Sebi would adjudicate the show cause-notice issued to the company expeditiously.
