The Hindu Business Line : Engineers India interim dividend: HC directs SEBI to act on grievance

THE Andhra Pradesh High Court has directed SEBI to immediately take appropriate action on the grievances of investors pertaining to the cancellation of 550 per cent dividend by Engineers India Ltd (EIL).

The Court was responding to the petition filed by an investor, Mr K. Anjaneya Raju, who questioned the inaction of the market regulator on his complaints against EIL in cancelling the interim dividend. The petitioner has urged the Court to direct the market regulator to take necessary steps in addressing his grievance against EIL.

Though standing counsel for SEBI took notice of the petition on September 15 last year and sought time to obtain instructions from the regulator, he failed to receive instructions and sought time to file counter affidavit.

Responding to this, the Court viewed that SEBI is under obligation to conduct investigation into the matter of EIL as provided under the Regulation 5 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 2003, whenever the irregularities said to have been committed by any company were brought to the notice of the market regulator.

"If the complaint of the petitioner does not attract the provisions of law, the first respondent (SEBI) is under obligation to inform the petitioner accordingly. There cannot be any justification for the inaction on the part of the first respondent (SEBI) for such a long time," Mr Justice L. Narasimha Reddy of AP High Court said in his interim orders.

"Hence, there shall be an interim direction to the first respondent (SEBI) to take necessary steps in accordance with law, within a period of six weeks from the date of receipt of a copy of this order," the Court said.

EIL, which had declared an interim dividend of Rs 55 per equity share of Rs 10 each out of the company's reserves on September 27, 2003, did not pay the dividend, the petitioner submitted to the Court.

The petitioner, who is holding 50,000 shares of EIL, had filed several complaints with the SEBI seeking action against EIL for causing serious loss to the investors.

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