SEBI’s Order Restraining Appellant, Chairman of Company ‘P,’ Unsustainable as No Specific Statutory Violation Was Imputed | SAT

Case Details: Rajib Kumar Mishra vs. Securities and Exchange Board of India - [2024] 169 taxmann.com 755 (SAT-Mumbai)

Judiciary and Counsel Details

• Justice P.S. Dinesh Kumar, Presiding Officer, Ms Meera Swarup & Dr Dheeraj Bhatnagar, Technical Member
• Akhilesh Pandey, Adv., Subir Kumar, Valentine Mascarenhas & Vaishnavi Pawar, Advs. for the Appellant.
• Chetan Kapadia, Sr. Adv., Prapti Kedia & Mohit Kumar Sharma, Advs. for the Respondent.

Facts of the Case

In the instant case, directors of company PFS/100% subsidiary of company ‘P’ resigned and a copy of resignation letter was forwarded to SEBI alleging that appellant/chairman of ‘P’ failed to accede to request made by independent directors for obtaining external legal advice and not providing information about appointment and joining of a person ‘R’.

SAT Held

Whole Time Members (WTMs), SEBI passed impugned order holding that appellant had looked other way, while managing director ran company as per his wishes, disregarding concerns raised by independent directors.

Accordingly, appellant was restrained from holding any position in any listed company for a period of six months and also levied with a penalty of Rs. 10 lakhs. It was noted that appellant instructed HR department to give information sought by independent directors and also.