sebi:WTM/AN/MIRSD/MIRSD-RAC-1/30805/2024-25
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Facts / Headnote
Censure and warning issued to Steel City Securities Limited; Noticee directed not to employ/engage/associate with Mr. Satish Kumar Arya for a period of 1 month.
Provisions invoked
- s. 173
- s. 394
- s. 391
- s. 420
- s. 394(2)
- s. 190(1)
Regulations
- Reg. 26(1)
- Reg. 27(5)
- Reg. 5(e)
- Reg. 27(1)
- Reg. 5
- Reg. 26(1)(v)
Parties
- Steel City Securities Limited
Holding
Steel City Securities Limited was found to have violated regulation 5(e) of the SEBI (Stock Brokers) Regulations, 1992 read with clause (2), clause (3)(a) and proviso to clause (6) of Schedule II of the Intermediaries Regulations, as its director Mr. Satish Kumar Arya failed the 'fit and proper person' criteria and the Noticee failed to replace him within 30 days. The Noticee was censured and warned, and directed not to associate with Mr. Arya for one month.
Full text
Order in the matter of Steel City Securities Limited Page 2 of 36 2. The present matter emanates from post enquiry show cause notice (“Post Enquiry SCN”) dated May 02, 2024 issued to the Noticee under regulation 27(1) of the SEBI (Intermediaries) Regulations, 2008 (“Intermediaries Regulations”). Vide the above mentioned Post Enquiry SCN, the Noticee was called upon to show cause as to why action as recommended by the Designated Authority (“DA”) or any other direction as deemed fit should not be issued / imposed on the it in terms of the Intermediaries Regulations. The Post Enquiry SCN issued enclosed therewith the Enquiry Report of the DA (“DA Report”) dated March 28, 2024 submitted with respect to the Noticee.
Order in the matter of Steel City Securities Limited Page 3 of 36 prudence applying reasonable diligence cannot make the same mistake more than once especially with regard to the relevant details pertaining to his own educational qualification. Accordingly, the liability of Mr. Satish Kumar Arya cannot be absolved merely on the ground that he has signed the forms without verifying the contents and it was an inadvertent mistake on his part. It is established that Mr. Arya had failed to maintained high standard of integrity, honesty, ethical behaviour, reputation, fairness and character with regard to submission of his educational qualification i.e. B. Com degree from Andhra University to the stock exchange. Therefore, Mr. Arya does not satisfy the criteria of “fit and proper person” by virtue of clause 3(a) of Schedule II of the Intermediaries Regulations.
Order in the matter of Steel City Securities Limited Page 4 of 36 vide letters dated June 05, 2024 and June 11, 2024. Thereafter, an opportunity of personal hearing was given to the Noticee on July 31, 2024. On July 31, 2024, the authorized representatives (“ARs”) of the Noticee appeared before me in person and reiterated the submissions made vide the aforesaid letters. Further, Mr. Satish Kumar Arya who also appeared for the hearing inter alia stated that he does not know how the impugned certificate came to be placed in the records. He has also submitted that the Noticee has been a member of five exchanges. The ARs sought time of ten days to file additional written submissions which was acceded to. Subsequently, the Noticee / AR filed additional submissions vide letter dated August 07, 2024.
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Source: SecMarx — sebi:WTM/AN/MIRSD/MIRSD-RAC-1/30805/2024-25. 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.