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Supreme Court gives SEBI 4 months for probing SCORES complaint issue

PALAK SHAH Mumbai | Updated on January 29, 2020 Published on January 29, 2020

Declines to stay SAT order; admits to diluting harsh remarks against regulator

The Supreme Court on January 27 set a four-months deadline for SEBI to probe complaints received on its SCORES platform with regard to alleged wrongful disclosures by the promoters of Bharat Nidhi, PNBF and Camac.

In November 2019, the Securities Appellate Tribunal (SAT) had asked SEBI to probe these complaints but the regulator challenged the tribunal order in the apex court seeking stay on its operation and effect. A complete stay has not been granted by the Supreme Court.

A copy of the apex court’s order with BusinessLine shows that the top court has given only a relief to SEBI by diluting SAT’s observations in paragraph 20 of its the order and extended the deadline for the probe without granting a stay on operation or effect of the order. The top court said that it has diluted the observations of SAT in the particular para.

“Maybe there was some remiss on the part of SEBI to act as a regulator, but casting aspersion was not warranted in the facts and circumstances of the case. As such, the adverse observations made in Paragraph No 20 are hereby diluted. However, as prayed for, time is granted to deal with the complaints positively and objectively within four months from today in accordance with law,” the Supreme Court’s order said.

‘Hasn’t performed duties’

In paragraph 20, SAT had said, “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 a 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.”

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

 

Published on January 29, 2020
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