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Friday, Nov 28, 2003

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Samir Arora moves HC for getting SAT constituted

Dinesh Narayanan

Mumbai , Nov. 27

MR Samir Arora, former Chief Executive Officer of Alliance Mutual Fund, has moved the Bombay High Court seeking directions to the Government to constitute the Securities Appellate Tribunal at the earliest, a source close to the development told Business Line.

Mr Arora, who is fighting to get his name cleared from a Securities and Exchange Board of India inquiry that alleged he obstructed Alliance's efforts to sell the asset management company for personal gains and also indulged in insider trading, had appealed to the Tribunal to set aside the SEBI ban on him. The Government, however, is yet to constitute the full Tribunal that was recently expanded to a three-member body from the earlier single-member one.

SEBI banished Mr Arora from the capital markets on August 9 for alleged insider trading and personally benefiting from suppressing information against the interests of the investors of the fund he managed. It barred him from dealing in the securities market directly or indirectly until further orders. The regulator confirmed its order on September 24 and ordered a deeper enquiry into the role of the AMC and trustees of Alliance.

The Securities Appellate Tribunal is yet to get a new chief after Mr C. Achuthan, the first Presiding Officer of SAT, retired on November 3. The Government expanded the Tribunal earlier this year and notified the appointment of Mr B. Samal, former Chairman of Allahabad Bank, and Mr R. Lakhanpal, former Director-General of Foreign Trade, to the Tribunal. It is, however, yet to name the Presiding Officer of the quasi-judicial body.

Reports in the past have indicated that a former judge of the Madhya Pradesh High Court may be appointed to head the Tribunal. Meanwhile, it is learnt that Mr Samal has been asked to officiate as Presiding Officer pending appointment of the third member. He is also understood to have fixed dates for hearings in matters pending before the Tribunal. Mr Arora's case is listed for December 15, it is learnt.

A law expert, however, expressed doubt whether the Governing Act allows Mr Samal acting as Presiding Officer. According to Section 15M of Chapter VIB of the SEBI Act, "A person shall not be qualified for appointment as the Presiding Officer of a Securities Appellate Tribunal unless he is, or has been, or is qualified to be, a Judge of a High Court; or has been a member of the Indian Legal Service and has held a post in Grade I of that Service for at least three years; or has held office as the Presiding Officer of a Tribunal for at least three years." Mr Samal does not qualify under any of the criteria, the expert said.

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