sebi:AO/SBM/EAD/108/2018

SEBI · SEBI · 2013-04-17 · SURESH B MENON, ADJUDICATING OFFICER

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Facts / Headnote

Penalty imposed on Noticee for failure to obtain SCORES authentication

Provisions invoked

• s. 15
• s. 15H
• s. 15I
• s. 15J

Parties

• Munis Forge Limited

Holding

The Adjudicating Officer held that Munis Forge Limited was liable for penalty under section 15HB of the SEBI Act for its failure to obtain SCORES authentication and failure to comply with SEBI directions/circulars on SCORES authentication during the period it was a listed company on the BSE, and imposed a penalty of Rs. 1,00,000.

Full text

Page 2 of 7 of listed companies to obtain SCORES authentication would not only be deemed as non-redressal of investor grievances, but, also indicate wilful avoidance of the same.

Page 3 of 7 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 5. Show Cause Notice ref No. EAD-6/AK/VG/11963/2017 dated May 26, 2017 (hereinafter referred to as ‘SCN’) was issued to the Noticee under the provisions of Rule 4(1) of the Adjudication Rules, to show cause as to why an inquiry should not be held against the Noticee and penalty, if any, should not be imposed on the Noticee under the provisions of section 15HB of the SEBI Act. The SCN issued to the Noticee returned undelivered.

Page 4 of 7 Circulars. In this context, I find that Hon’ble Securities Appellate Tribunal (‘SAT’) has consistently held that the importance of complaints redressal system initiated by SEBI in June 2011 cannot be undermined and its sanctity has to be maintained by listed companies. In this regard, it is pertinent to refer to the observations of Hon’ble SAT in the matter of Acalta Trading Co. Ltd. vs. SEBI (decided on 20.12.2016) - " ….. Appellant company being a listed company was bound to comply with the direction issued by SEBI from time to time. It was obligatory on part of the appellant to redress the investors’ grievances within the stipulated time after obtaining SCORES authentication as per the repeated circulars issued by SEBI. Inspite of the letter addressed by SEBI on December 2, 2013 in that behalf the appellant had failed to do the needful. It is on record that the appellant had applied for SCORES authentication only on June 12, 2014 and the authentication was granted on June 13, 2014. Various reasons given by the appellant for not complying with the directions of SEBI within the stipulated time and the fact that the investors’ grievances have been redressed before the issuance of the show cause notice, do not obliterate the violations of the law committed prior to issuance of the show cause notice .

Source: SecMarx — sebi:AO/SBM/EAD/108/2018. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.