Securities and Exchange Board of India (SEBI) has drawn the ire of the Securities Appellate Tribunal (SAT) for the poor response to investor complaints made on the market regulator’s online platform SCORES. While conducting a hearing in a matter, SAT observed that SEBI’s treatment of complaints on SCORES was a mere “eyewash”.

SCORES is an online platform designed to help investors lodge their complaints pertaining to the securities market. SAT observed that complaints were 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. SAT went on say that “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.”

“We find the approach adopted by the respondents (SEBI) to be a strange one. Such computer generated disposal of a serious complaint speaks volumes on the conduct of the respondents in treating the minority shareholders in this shabby manner. It seems that the respondents have lost sight of the mandate provided to them under Section 11 of the SEBI Act which mandates SEBI to safeguard the interest of investors. Disposal of the complaint in this manner in the instant case indicates non-application of mind and non-consideration of the interest of investors. We have no hesitation in stating that SEBI, as a regulator in the instant case, has not performed its duties and has kept the complaint pending for more than six years which speaks volumes by itself.”

What SAT found most strange was 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, while in the same breath it said it would neither confirm nor deny the existence of any investigation conducted by the market regulator.

SEBI’s error,according to SAT

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.’ In fact, the regulator even made unappeasable remarks, according to SAT.

“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. You may contact the Dealing Officer for clarification, if any, (Details of Dealing Officer SEBI is available under “view complaint status” by logging in to the SCORES website, i.e. www.sebi.gov.in or you may contact SEBI’s toll-free helpline,” SEBI told the complainant.

“We find that before the Delhi High Court, SEBI informed that the matter is under investigation by them. We find it strange that while disposing the complaint SEBI would neither confirm nor deny as to whether investigation in the complaint was going on or not,” SAT said.

According to SAT, thus SEBI’s disposal of complaints on the SCORES platform was no disposal in the eyes of law but merely an eyewash, as it was without settling the controversy involved in the complaints.

SEBI did not answer a query seeking their response on the SAT observations.

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