sebi:Order/KS/VB/2019-20/4537
Facts / Headnote
Show Cause Notice dated March 28, 2019 alleging violations of Section 11C(3) read with Section 11C(6) disposed of without imposition of any penalty under Section 15A(b)
Provisions invoked
- s. 11
- s. 15A
- s. 19
- s. 11(3)
- s. 27
- s. 11C(6)
- s. 11C
- s. 12
- s. 11C(3)
- s. 11C(2)
- s. 11(6)
- s. 149(12)
- s. 2(47)
- s. 149(6)
Regulations relied on
- SEBI (LODR) Regulations, 2015
Parties
- Shri N. V. Simhadri
Holding
The charge against the Noticee, an independent Non-Executive director of IKF, for violation of Section 11C(3) read with Section 11C(6) of the SEBI Act does not stand established. The SCN dated March 28, 2019 is disposed of without imposition of any penalty.
Full text
Page 2 of 13 Act, 1992 and Rule 3 of SEBI (Procedure for Holding Inquiry and imposing penalties by Adjudicating Officer) Rules, 1995 (Adjudicating Rules) to inquire into and adjudge the alleged violations of the provisions of Section 11C(3) read with 11C(6) of the SEBI Act alleged to have been committed by the Noticee.
Page 3 of 13 5. Thus, I was not a director of IKF Board at the material time when it took decision and went for 1st GDR issue in March 2007. Similarly, I was not a Director of IKF Board when it took decision and went for 2nd GDR issue in May 2009. Further, I am also not a director of IKF when SEBI appeared to have issued SCN on 28.3.2019 i.e. almost 2 years after I resigned from IKF. Since I was an Independent non-executive Director, I was not involved in the day to day affairs of the Company and was receiving only those information/documents which were attributable through board processes. None of the information or documents pertaining the SEBI allegations pertaining to GDR issues came to me though the process of Board. 6.In spite of the fact that only Executive/Whole-time Directors, who are responsible for the day to day affairs of the company, may furnish such information and I was not the relevant person for providing such information on behalf of the company, SEBI had, inadvertently, erred in summoning me and interrogating me on 18.4.2012 and when I was unable give information pertaining GDR issues which happened years before my appointment as a director, I was wrongly implicated under Sec.11C(3) and 11C(6) of SEBI Act. As a result, I had to undergo these avoidable proceedings and face harassment and mental agony for almost 6 long years which resulted in my health deteriorating to a precarious condition. 7.Though it is crystal clear that Sec 11C(3) and 11C (6) of SEBI A
Page 4 of 13 Further as Non-executive Director, I was receiving only those information/documents which were attributable through the process of the Board. I was not privy to any other information or documents relating to SEBI allegations pertaining to two IKF GDR issues. No such information or documents came to me through the process of the Board during my tenure as Non-executive director or non-executive independent director.
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