sebi:AO/SM-LS/ERO/30/2017

SEBI · SEBI · 2015-06-22 · S Madhusudhanan, 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. 15J

Holding

The Noticee was held liable for failing to obtain SCORES authentication as required by SEBI Circulars, and a penalty of Rs. 2,50,000 was imposed under Section 15HB of the SEBI Act.

Full text

Page 2 of 5 transfer of Shri S V Krishanmohan, the undersigned was appointed as Adjudicating Officer vide Order dated June 22, 2015. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

Page 3 of 5 authentication by December 18, 2013. Despite receipt of the said letter, the Noticee once again failed and neglected to comply. Therefore, SEBI initiated adjudication proceedings against the Noticee, and the erstwhile AO had issued a SCN dated March 06, 2015. Despite, issuance of public notice with regard to SCN and an opportunity for personal hearing, the Noticee has neither filed a reply nor appeared before me. On verifying from the department, it is also learnt that the Noticee has not obtained SCORES authentication even as on date. I note that this conduct demonstrates the lackasadical attitude of the Noticee and is unbecoming of a listed company.

Page 4 of 5 14. In this regard, it is pertinent to note that the Hon’ble Securities Appellate Tribunal in the matter of Port Shipping Company Ltd. Vs. Securities and Exchange Board of India has held that :- “Admittedly, the appellant company continues to be a listed company and, therefore, it was obligatory on part of appellant company to obtain SCORES authentication within the time stipulated by SEBI. However, the appellant has consistently failed and neglected to comply with the directions of SEBI and it is only when SEBI initiated penalty proceedings, the appellant chose to comply with the directions of SEBI. Therefore, in the facts of the present case appellant deserved higher penalty. However, after taking all the factors set out by the appellant as mitigating factors, the adjudicating officer of SEBI has imposed nominal penalty of Rs. 1,50,000/- as against the imposable penalty of Rs. 1 crore. In such a case, it cannot be said that the penalty imposed is excessive or unreasonable” (Emphasis supplied)

Source: SecMarx — sebi:AO/SM-LS/ERO/30/2017. 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.