SAT Reduces Sebi's Penalty on Rose Valley by Rs 90 Lakh
Published: 12th December 2013 03:33 PM
Last Updated: 12th December 2013 03:33 PM
The Securities Appellate Tribunal (SAT) today upheld Sebi's order against Rose Valley Real Estates And Construction, in a case related to failure of the company to comply with summons issued by the market regulator but drastically reduced the fine amount.
SAT reduced the quantum of penalty imposed on the real-estate firm by Sebi from Rs one crore to Rs 10 lakh and asked it to pay the fine within two months.
The case is related to a probe by Securities and Exchange Board of India (Sebi) over charges that Rose Valley had raised money by issuing debentures between the years 2001-2008 to more than 49 persons in each of the fiscal years without complying with the regulator's norms for the same.
Sebi had sought details from Rose Valley that could have helped the regulator probe the matter but the firm had failed to fully comply with the market regulator's summons.
In March this year, Sebi had slapped a penalty of Rs one crore on Rose Valley for non-compliances with its summons following which the company had approached SAT challenging the regulator's order.
After holding a hearing, SAT today said that Rose Valley "has been willing to furnish documents relating to issuance of debenture through private placement from time to time and has in fact fully furnished particulars though belatedly in the adjudication proceedings which were also initiated belatedly".
Accordingly, SAT ruled that it was "inclined to modify the impugned order dated March 26, 2013 and to reduce the monetary penalty to Rs 10 lakh to be paid by the appellant (Rose Valley) within two months from the date of passing of this order while upholding the rest of the impugned order failing which the respondent (Sebi) shall be at liberty to recover the same as per law".
Sebi had initiated a probe against Rose Valley following a reference from Registrar of Companies (RoC), West Bengal that the firm had repeatedly issued debentures in financial years from 2001 to 2008 without filing necessary documents.
As part of its probe, Sebi had issued various summons to Rose Valley asking it to submit information such as filing of prospectus, opening and closing dates of subscription, number of applications received, among others.
However, Sebi had observed that even though Rose Valley had replied to summons, the details submitted were partial and incomplete.