SEBI moves SC against SAT for terming its handling of online complaints an ‘eyewash’

PALAK SHAH Mumbai | Updated on January 20, 2020 Published on January 19, 2020

Apex court may take matter up this week

SEBI has moved the Supreme Court challenging an order by the Securities and Appellate Tribunal (SAT) asking it to conclude investigations into complaints filed on its online platform in a time-bound manner.

SEBI’s plea will be taken up by the top court this week, sources told BusinessLine. The markets regulator is likely to adopt a stance saying how it deals with complaints on its online platform, SCOREs (SEBI Complaints Redress System), is its administrative decision and not something that can be appealed, the sources said.

In November 2019, SAT had asked SEBI to probe complaints with regard to wrongful disclosures by the promoters of Bharat Nidhi Ltd. (BNL), PNBF and Camac. The regulator converted the information into ‘market intelligence’ and declined to say what would be its outcome. It said that the status of the complaint cannot be ‘ascertained.’

“The information provided by you will be treated as market intelligence. This information shall be treated as confidential. This information will be analysed, and if found necessary, further action will be taken. The status of the information cannot be ascertained as SEBI conducts the investigations confidentially in a holistic manner. In order to aid SEBI to carry out its surveillance activity, you are encouraged to provide correct and complete information. SEBI will neither confirm nor deny the existence of any investigation. Any regulatory actions taken by SEBI are published on the SEBI website,” SEBI had told the complainant.

SAT had said that SEBI’s treatment of complaints on SCOREs was a mere “eyewash.”

“The tribunal fails to fathom as to why the complaint could not have been decided unless SEBI officials had a vested interest in not deciding the matter,” the SAT order said. The tribunal said it was strange that SEBI, in a communication to the complainant, had stated that the information submitted by the appellants would be analysed and investigated in a holistic manner, but would neither confirm nor deny if it had conducted an investigation.

In contrast, SEBI told the Delhi High Court that it was investigating the matter, the tribunal observed.

SAT found that complaints had been filed online with SEBI against 16 listed companies and SEBI-registered intermediaries but were disposed by the regulator without deciding or settling the issues raised in the complaints.

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Published on January 19, 2020
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