Securities Appellate Tribunal
M/S. Vintel Securities Private Limited vs Sebi on 23 November, 2009
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No. 218 of 2009
Date of Decision: 23.11.2009
M/s. Vintel Securities Private Limited
102, Blue Moon Chambers
28/33, Nagindas Master Road, Fort,
Mumbai-400 023 ...... Appellant
Versus
The Adjudicating Officer,
Securities and Exchange Board of India
SEBI Bhavan,
Plot No. C4-A, "G" Block,
Bandra Kurla Complex, Bandra (East), Mumbai. ...... Respondent
Mr. Ramesh Mishra, Practicing Company Secretary, for the Appellant. Dr. Poornima Advani, Advocate with Ms. Harshada Nagare, Advocate for the Respondent.
CORAM : Justice N.K. Sodhi, Presiding Officer Samar Ray, Member Per : Justice N. K. Sodhi, Presiding Officer (Oral) This appeal is directed against the order dated August 26, 2009 passed by the adjudicating officer imposing a monetary penalty of Rs. 7 lacs on the appellant on account of its failure to provide the necessary information to the investigating authority in response to the summons issued by it.
The Securities and Exchange Board of India (for short the Board) carried out investigations in respect of the scrip of M/s. Millenium Cybertech Limited (for short the company) for the period from June 01, 2005 to September 30, 2005. During this period, the price of the scrip increased from Rs. 65.50/- to Rs. 242/- witnessing a sharp increase. Investigations revealed that some entities including the appellant were found to be involved in the manipulation of the price of the scrip in a fraudulent manner. The activities of the entities resulted in the creation of artificial volumes 2 influencing the price of the scrip. The appellant is one of the entities which is said to have dealt in the scrip during the period in question. It traded through M/s.Galaxy Broking Limited as the broker. During the course of the investigations, the investigating officer sought certain information and documents from the appellant including details of demat account, bank accounts in relation to its dealings in the scrip of the company. The appellant was required to furnish the details such as relationship of its promoters and directors with the company and its directors and promoters. It was also required to furnish its shareholding pattern, details of the transactions executed in the scrip of the company during the relevant period. It appears that the appellant had executed some off market transactions in the scrip and the details of those transactions alongwith demat accounts and bank accounts etc. were also sought from it. The appellant failed to furnish any information to the investigating authority. It is on account of this failure that the adjudicating officer has imposed the monetary penalty of Rs. 7 lacs.
We have heard the authorised representative of the appellant and the learned counsel for the respondent Board. The fact that the appellant did not furnish any information is not seriously disputed before us. The learned authorised representative points out that in January 2007 the income tax department had conducted a survey of the premises of the appellant under Section 133A of the Income Tax Act and certain documents and books of accounts which were found to be of incriminating nature had been impounded and, therefore, the appellant was unable to respond to the summons issued by the respondent Board. We are unable to accept this plea. It is common ground between the parties that three summons were issued to the appellant during the months of June and July 2006 for the production of documents and records pertaining to the transactions executed by it in the scrip of the company. The appellant had also been directed to appear in person so that the statement of its representative could be recorded. The appellant did not co-operate with the investigating officer nor did it produce the necessary records. Its representative also did not appear. It is clear from the appeal paper book that the relevant records had been impounded by the income tax authorities only in January, 2007 whereas as the appellant was required to furnish the requisite information/documents in the 3 year 2006 when the record was admittedly available with the appellant. In this view of the matter, we are satisfied that the appellant thwarted the investigation in the matter and did not co-operate by producing the relevant record which was in its possession. It is obvious that the appellant was evading the investigations which, indeed is a serious matter. The Board as a statutory regulator cannot perform its functions if market players like the appellant were to cause hindrance during the course of the investigations. This being so, we find no ground to interfere with the impugned order.
No other point has been raised.
In the result, the appeal fails and the same stands dismissed with no order as to costs.
Sd/-
Justice N.K. Sodhi Presiding Officer Sd/-
Samar Ray Member 23.11.2009 pmb Prepared and compared by prerana