The Securities Appellate Tribunal has been reported as imposing a fine upon Securities and Exchange Board of India, the markets regulator.
The SAT on June 28 in an order found lapses in a case which involved the SEBI imposing a fine of Rs 50,000 on an official of BGIL Films and Technologies.
SEBI's adjudicating officer had imposed a penalty of Rs 50,000 on a former compliance officer of the firm. The officer on October 26, 2018 in his observation alleged lapses over making disclosures with insider trading norms.
An appeal was subsequently raised with the appellant stating that she had tendered her resignation from BGIL Films on February 19, 2010 and was no longer in official capacity from March 2, 2010. She also conceded that she was not a part of the company's board meeting held on Feb 23, 2010.
The SAT observed, "Inspite of this admitted position and inspite the adjudicating officer observing that a benefit of doubt should be given to the appellant, (adjudicating officer) still imposed a penalty of Rs 50,000 (rupees fifty thousand only)."
The SAT has quashed SEBI's October 2018 order and said the penalty was wholly unjustified.
In its order the tribunal noted that the appellant underwent litigation and faced harassment for approximately one-and-a-half years. It also observed that a substantial amount of money was spent towards fees paid to an advocate for drafting an appeal.
"The appellant is entitled to costs which we compute at Rs 50,000. The said cost of Rs 50,000 shall be paid by the respondent by a demand draft to the appellant," the order said.
This is at least the second case in the month that involves the SAT finding a lapse on the part of the market regulator. In another case that the SAT delivered a verdict on June 20, the market regulator was found erring in a similar fashion. In the case involving the SEBI's decision on Supreme Tex Mart Ltd, the SAT found that an interim order restraining a person from trade may have serious consequences.
The SEBI in an interim order passed on November 2017 restrained the company's directors from accessing capital markets. A former Director who had resigned prior to the lapses had been recorded complained of being affected by the ruling.