'Contempt of court' after 'judicial dishonesty': SAT summons SEBI official

PALAK SHAH | | Updated on: Dec 27, 2021

Market regulator was pulled up for 12-year delay in sending show cause notice to a trader for alleged insider trading and share price manipulation

Market regulator SEBI's casual approach to an order by the Securities and Appellate Tribunal (SAT) has irked the judges at the tribunal. In a rare instance, SAT has asked SEBI's adjudicating officer (AO) to appear before it in person and termed the regulator's actions as 'contempt of court.'

Earlier this month SAT had pulled up SEBI for what it termed as 'judicial dishonesty' and asked the AO to file a sworn affidavit for a 12-year delay in sending a show cause notice (SCN) to a trader for alleged insider trading and share price manipulation. SEBI failed to file the affidavit, which did not go well with the SAT presiding officer Tarun Agarwala and judicial member M T Joshi. Both the judges have now asked the SEBI AO to be personally present before them.

"By our order dated December 16, 2021 we had directed the AO to file an affidavit and in spite of the direction no such affidavit has been filed. This itself amounts to contempt of the proceedings of this Tribunal," SAT said in its recent order.

SAT said a request was made by the SEBI counsel for an adjournment as they sought to file an appeal before the Supreme Court (SC) against the tribunal's order dated December 16, wherein it had stayed the effect and operation of the SEBI order.

SAT has allowed SEBI four weeks time to get an order from the Supreme Court and if it fails, the AO will have to appear before the tribunal on January 27, 2022. SEBI had issued the SCN to one Yatin Pandaya 12 years after the alleged violations or manipulative trading between 2008 and 2009 in the share price of Sterling International Enterprises. Pandya cited several SAT judgements before SEBI to argue that the regulator had delayed its actions so much that it was difficult for him to remember the incidents and circumstances of over a decade ago.

Published on December 27, 2021
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