Supreme Court hauls up Sebi over show-cause after 10-year probe
Supreme Court has pulled up the Securities and Exchange Board of India (Sebi) for issuing a show cause notice to a company after ten years of conducting an investigation for an alleged securities law violation. The case relates to the misuse of funds raised through preferential allotment of shares by Alps Motor Finance.
The court has directed Sebi to hold an inquiry against its officers on why the delay happened and submit its report.
Securities lawyers said this is probably the first time the apex court has asked Sebi to hold an inquiry against its officers for inordinate delay in issuing show cause notices.
This case could have a bearing on several other identical cases pending before the Supreme Court, they said.
«The appellant (Sebi) will file an affidavit of the executive director, Sebi, stating the date on which… Sebi received information regarding the allegations; the date on which the investigation under the Sebi Rules, 1995 was initiated; the date on which the investigation was completed; the date on which the adjudicating officer was appointed; the date on which the show cause notice was issued; and date on which the adjudicatory order was passed,» said the Supreme Court order passed by he two-judge bench comprising justices Sanjiv Khanna and Bela M Trivedi.
«With regard to the dates, if there is any delay and/ or default, an in-house inquiry will be held. Affidavit and the report of the in-house inquiry will be filed at least ten days before the next date of hearing,» said the order.
