SAT allows MCX public director Shankar Aggarwal to attend board meetings

The Securities and Appellate Tribunal (SAT) has ruled that Shankar Aggarwal, the public interest director (PID) of Multi Commodity Exchange (MCX), should be allowed to attend board meetings. Market regulator SEBI had barred Aggarwal from attending board meetings of MCX pending an interim order against him. But SAT observed that SEBI had failed to pass the final observations against him in the stipulated time and hence lifted the restrictions.

“It will be open to the appellant (Aggarwal) to attend the board meeting of MCX as a director and that the order of May 12, 2022, passed by SEBI and consequential order communicated by MCX will not come in the way,” the SAT order said.

SAT further said it had earlier directed SEBI to decide the matter against Aggarwal within four weeks after the hearing was concluded on March 31, 2022. But SEBI has still not passed any order. “We direct SEBI to pass an appropriate order within three weeks from today,” SAT said without making any adverse remarks against the whole-time member who had delayed the order.

In May, just two days after Aggarwal said he would start attending the board and committee meetings of the exchange in public interest, SEBI issued a diktat to restrict him from doing the same. SEBI had advised Aggarwal not to attend any Board/Committee meeting of the Exchange till further communication.

Aggarwal, a former bureaucrat, had recused himself from attending MCX board and committee meetings in the wake of an interim order by SEBI in the matter involving Dish TV. SEBI had passed an ex-parte order against Dish TV’s three independent directors (IDs) including Aggarwal, BD Narang and Rashmi Aggarwal, without giving them a prior hearing. But SEBI has restricted only Aggarwal from attending the board and committee meetings of MCX, while there was no such restraint against the other IDs of Dish TV on their attending meetings in other companies.

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SEBI member S.K. Mohanty had passed an ex-parte interim order on March 7 to freeze the demat accounts of the three IDs, holding them responsible for Dish TV’s failure in disclosing the voting results of an annual general meeting (AGM) held on December 30, 2021. Replying to SEBI’s interim order, the three IDs told the regulator that it was against the principles of natural justice since they were not given a hearing. Also, immediately after SEBI’s March 7 order, Dish TV had declared the results.

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