SECURITIES LAW
SEBI Finds Rajesh Exports Prima Facie Misrepresented ₹15.15 Lakh Crore Revenue; Bars Promoter From Market
The Securities and Exchange Board of India (SEBI) on Friday passed an interim ex parte order against jewellery company Rajesh Exports Ltd (REL) and its promoter, Rajesh Mehta. The regulator has prima facie found that the company misrepresented about ₹15.15 lakh crore in revenues attributed to its subsidiaries and step-down subsidiaries over a five-year period. The interim order was passed by SEBI Whole Time Member Kamlesh Chandra Varshney. He observed that the company's reported revenues could...
SEBI Cancels Registrations Of Five AIFs For Failure To File Quarterly Reports
SEBI has cancelled the registrations of five Alternative Investment Funds (AIFs) after finding that they failed to file mandatory Quarterly Activity Reports (QARs) for four consecutive quarters and did not respond to show cause notices issued by the regulator. The orders were passed by SEBI Designated Authority S. Madhusudhanan. The entities whose registrations have been cancelled are Victory Investment Fund, Rudrabhishek Infrastructure Trust, Prime Realty Capital, Florintree India Flexi...
SEBI Proposes Easier Cash Distribution Rules For InvITs Funding Road Maintenance Through Debt
The Securities and Exchange Board of India (SEBI) has proposed allowing Infrastructure Investment Trusts (InvITs) to add back major maintenance expenses for road projects, to the extent they are funded through external debt, while calculating cash available for distribution to investors. The regulator said the move is intended to facilitate ease of doing business. The proposal stems from representations made by the Bharat InvITs Association (BIA). The industry body argued that major maintenance...
SEBI Imposes ₹29.15 Crore Penalty on Suzlon Energy, Directors, Officials Over Misleading Financial Disclosures
The Securities and Exchange Board of India (SEBI) has imposed penalties totalling ₹29.15 crore on Suzlon Energy Ltd. and two of its senior officials, two directors, after concluding that a series of intra-group transactions and financial disclosures created a misleading picture of the company's financial position. The order was passed by SEBI Whole Time Member Sandip Pradhan. The regulator found that Suzlon recognised gains from transactions involving the transfer of its operation and...
SEBI Simplifies Nomination Rules For Demat Accounts, Mutual Fund Folios; New Norms Effective From September 1
The Securities and Exchange Board of India (SEBI) on Friday modified the nomination norms for demat accounts and mutual fund folios. The changes are aimed at simplifying investor onboarding and the nomination process. Under the revised norms, investors opening new single-holder demat accounts or mutual fund folios will have to either nominate a beneficiary or formally opt out of nomination. For jointly held accounts and folios, nomination will be optional. SEBI has also permitted investors to...
SEBI Drops Proceedings Against NDTV After SAT Set Aside Finding That It Was Controlled By VCPL
The Securities and Exchange Board of India (SEBI) has disposed of adjudication proceedings initiated against New Delhi Television Limited (NDTV). The proceedings concerned alleged non-disclosure of a purported change in control of the company. SEBI noted that the Securities Appellate Tribunal (SAT) had set aside an earlier SEBI order that formed the basis of the proceedings and held that Vishvapradhan Commercial Private Limited (VCPL) had not acquired direct or indirect control of NDTV. ...
'Inelegantly Drafted': Supreme Court Lays Down Two-Part Framework For Establishing Fraud Under PFUTP Regulations
The Supreme Court on Friday held that the definition of fraud under Regulation 2(1)(c) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003, suffers from "inelegant legislative drafting." Adopting a purposive interpretation of the provision, laid down a two-part framework for establishing fraud. Observing that the definition of fraud under Regulation 2(1)(c) appears to treat both deceitful intention and proof of wrongful gain or avoidance of loss as non-essential...
Supreme Court Defreezes Accounts Of Trader Involved In CNBC Awaaz 'Pandya Ka Funda' Market Manipulation Case
The Supreme Court on Friday ordered the defreezing of the bank accounts of trader Alpesh Vasanji Furiya, who is accused by SEBI of trading on advance knowledge of stock recommendations aired by CNBC Awaaz anchor Pradeep Pandya on the programme 'Pandya Ka Funda'. The Court passed the order after noting that ₹8.39 crore had already been deposited towards the disgorgement amount. The Court also directed that the amount lying in an escrow account shall continue. It issued notice on Furiya's...
Supreme Court Sets Aside Fraud Findings, ₹447-Crore Disgorgement Order Against Reliance In RPL Futures Trading Case
The Supreme Court on Friday partly allowed Reliance Industries Limited's appeal in the Reliance Petroleum Limited (RPL) futures trading case, setting aside findings of fraud and market manipulation, quashing a ₹447.27 crore disgorgement order, and directing the refund of ₹250 crore deposited by the company. However, the Court upheld the finding that Reliance had violated disclosure requirements relating to position limits under a 2001 Securities and Exchange Board of India (SEBI) circular and...
SEBI Censures 'stockbenifits.com' Operator Over Assured 18-20% Return Claims
The Securities and Exchange Board of India (SEBI) has issued a regulatory censure against the operator of 'stockbenefits.com' after finding that relationship managers associated with the website assured prospective clients of “18-20%” profits and that the research analyst failed to cooperate during a regulatory inspection. SEBI Quasi-Judicial Authority Biju S. passed the order. “The RMs of the Noticee were clearly trying to influence the decision of the investors by assuring them guaranteed...
SEBI Drops ₹6 Lakh Penalty On Rajendra Pathak In KLIL Case, Finds No Proof Of CFO Role
The Securities and Exchange Board of India (SEBI) on Wednesday, 27 May, set aside the penalty of Rs. 6 lakh imposed on Rajendra Pathak in the matter of K-Lifestyle & Industries Ltd. and dropped all proceedings against him, holding that there was no sufficient evidence to prove that Pathak worked as the company's Chief Financial Officer (CFO) during the relevant period or that he certified any misstated financial statements. Quasi-Judicial Authority Biju S. passed the order in compliance...