sebi:WTM/SM/IVD/ID10/16607/2022-23
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Facts / Headnote
Proceedings disposed of by modifying joint and several penalty of INR 18 Lakh to individual penalty of INR 1.50 Lakh on each of the 12 Noticees; amounts already paid appropriated against original liability.
Provisions invoked
- s. 15
- s. 15H
- s. 15T
Regulations
- Reg. 3
Parties
- Sagar Kadam
- Dharmendra Harilal Bhojak
- Mahadev Zilu Gawade
- Sorab Wadia
- Kalpana Mukesh Ruia
- Vallabhbhai Kakadiya
- Santosh Agarwal
- Jigna Vipul Vora
- Ashraf Usmani
- Ravi Ramniklal Kothari
- Nandkishore Didwania
- Pankaj Jayantilal Dave
Holding
The Board modified the joint and several penalty of INR 18 Lakh imposed by the Adjudicating Officer to an individual penalty of INR 1.50 Lakh on each of the 12 Noticees, and disposed of the SCN dated October 01, 2020 without further directions.
Full text
Order in the matter of Finalysis Credit and Guarantee Company Limited Page 1 of 13 WTM/SM/IVD/ID10/16607/2022-23 SECURITIES AND EXCHANGE BOARD OF INDIA
Order in the matter of Finalysis Credit and Guarantee Company Limited Page 2 of 13 1. The present proceedings rest with a show cause notice dated October 01, 2020 (hereinafter referred to as "the SCN") issued under Section 15-I (3) of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”) in respect of trading activities in the scrip of Finalysis Credit and Guarantee Company Limited (hereinafter referred to as “the Company”) calling upon the Noticees to show cause as to why the joint and several monetary penal liabilities imposed vide the adjudication order dated September 03, 2020 be not reconsidered and instead, separate entity wise monetary penalty should not be imposed in terms of Section 15 HA of the SEBI Act, 1992.
Order in the matter of Finalysis Credit and Guarantee Company Limited Page 3 of 13 144 entities were let off with an administrative warning based on a criteria of less than 0.75% per entity share in the artificial volume. Thereafter, subsequent to the adjudication 30 entities were let off even without an administrative warning based on a criteria of less than 1.78 % per entity share of the artificial volume. There is a huge contradiction on this differential punishment / treatment. Further, we do not find any logic in adopting the cut off of 1.78% of the artificial volume in deciding to let off people who traded below that level without even a warning and in imposing a monetary penalty on entities who traded even slightly above that level. Test of reasonable classification has to be based on legally sound footings; not based on some arbitrary numbers particularly while imposing a penalty on a segment of the group who are party to the violations. In the instant case, we find that this logic of intelligible differentia is lacking.
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Source: SecMarx — sebi:WTM/SM/IVD/ID10/16607/2022-23. 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.