SAT raps Sebi for ‘shabby’ handling of complaints
The Securities and Appellate Tribunal (SAT) has hauled up the Securities and Exchange Board of India (Sebi) for giving computer-generated responses to investor complaints filed on its online platform ‘Scores’, and for disposing of the matter without settling the case.
“We find the approach adopted by Sebi to be a strange one. Such computer-generated disposal of serious complaints speaks volumes on the conduct in treating the minority shareholders, in such a shabby manner,” it said.
The regulator’s action was merely an eyewash, it said, while delivering a judgment on a matter related to an investor complaint.
Scores is an online platform designed to help investors lodge their complaints pertaining to the securities market. The tribunal observed that complaints were filed six years ago against 16 listed entities, including the registered intermediaries.
“It seems that the respondents have lost sight of the mandate provided to them under Section 11 of the Sebi Act which mandates it to safeguard the interest of the investors. Disposal of the complaint in this manner in the instant case indicates non-application of mind and non-consideration of the interest of the investors,” the SAT said in an order.
“We have no hesitation in stating that Sebi has not performed its duties… 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 matter pertains to a complaint filed in 2013 by minority public shareholders of three firms — Bharat Nidhi (BNL), PNB Finance and Camac Commercial — for non-disclosure of promoter shareholding of BNL and also violation of the minimum public shareholding requirement by BNL.
BNL, PNBF and Camac hold 24.41 per cent, 9.29 per cent and 13.3 per cent shares, respectively, in Bennett, Coleman & Co (BCCL). The contention of the complainant was that the three companies are owned and controlled by Vineet Jain, Samir Jain and their family members, who are the managing directors of BCCL.
Replying to this, Sebi said the information submitted by the appellants would be analysed but, on the other hand, it would neither confirm nor deny the existence of any investigation conducted by them. Later, it disposed of the case and said the information provided by the complainants would be taken as market intelligence and would also be treated as confidential. The SAT questioned this.
The tribunal, on Thursday, had set aside the Sebi’s order and allowed the complainants’ appeal. It also directed the regulator to “consider and decide the matter by a reasoned and speaking order within six weeks from the date of presentation along with the appellate order”.