Mumbai February 18, 2014:- Securities Appellate Tribunal (SAT) has quashed Sebi‘s order against Radhe Developers (India) and its three top executives with respect to violations of norms pertaining to prevention of insider trading.
In March, last year, the Securities and Exchange Board of India (Sebi) had slapped a total penalty of Rs 21 lakh on Radhe Developers, MD Ashish Patel for trading in the company’s scrip, while possessing un-published price sensitive information related to its quarterly earnings as well as not complying with model code of conduct.
Besides, the market regulator had slapped Rs 5 lakh each on two company directors — Praful Patel and Milan Patel — for failing to adopt the model code of conduct as required under prohibition of Insider Trading Regulations.
Later, the entities had approached SAT challenging Sebi rulings in the case.
Two similar worded orders on the matter by SAT said that “…Impugned order dated March 28, 2013 is quashed and set aside with liberty to the respondent to pass fresh order on merits, by issuing fresh show cause notice if deemed fit”.
“If fresh show cause notice is issued, then appellant would be at liberty to file reply to the said show cause notice,” it added in the orders dated February 13.
In a separate matter, SAT has allowed Sebi to issue a show cause notice to Clearwater Capital Partners (Cyprus) for not following orders with respect to a public offer.
On November 30, 2012, while approving ‘draft letter of offer’ by Clearwater Capital, Sebi had called upon the entity to comply with certain directions. Following which the company had made representation against Sebi orders.
However, before final decision could be taken by Sebi, Clearwater Capital made public offer and acquired shares, without complying with the directions from the regulator.
In an order on February 12, among others, SAT noted that “as on date there is no decision of Sebi on the objections raised by appellant (Clearwater) regarding the directions contained in the communication dated November 30, 2012”.
Accordingly, SAT has permitted Sebi “to issue show cause notice, to appellant, if they choose to do so, regarding the directions contained in communication dated November 30, 2012 and consequences for non compliance of those directions”.
“If Sebi issues show cause, then appellant would be at liberty to file reply. Thereupon Sebi shall pass final order after giving an opportunity of hearing to the appellant,” it added.- PTI
