Companies & Sectors
Pantaloon pays Rs7.5 lakh to settle investor grievance case with SEBI

SEBI said Pantaloon paid Rs6.5 lakh towards settlement charges and Rs1 lakh as legal expenses, pursuant to which the proceedings initiated by the regulator stand settled

Mumbai: Capital markets regulator Securities and Exchange Board of India (SEBI) has agreed to settle a case related to Pantaloon Retail failing to redress investor grievances after the company agreed to pay Rs7.5 lakh towards settlement charges and legal costs.


SEBI had passed an order in October 2011, wherein it had imposed a penalty of Rs5 lakh on Pantaloon Retail (India) Ltd after finding the company to have failed in redressing the investor grievances within the stipulated time.


While Pantaloon had challenged SEBI's order in an appeal before the Securities Appellate Tribunal (SAT), it later proposed to settle the case through SEBI's consent mechanism, which allows for settlement of the matter in certain cases.


In its final consent order in the matter, SEBI has now said that Pantaloon has paid Rs6.5 lakh towards settlement charges and Rs1 lakh as legal expenses, pursuant to which the proceedings initiated by the regulator stand settled.


SEBI said Pantaloon representatives had a meeting with SEBI's Internal Committee in in April, after which they had proposed the revised consent terms involving these payments to settle the proceedings.


The proposal was accepted by SEBI's High Powered Advisory Committee, as there were no investor grievance pending against the company. The panel of whole-time members of SEBI also accepted these recommendations of the high-powered committee.


After the company made the payments towards settlement of the proceedings, the SAT allowed it to withdraw its appeal to enable SEBI to pass the consent order, the regulator said.


However, SEBI maintained that its consent order is "without prejudice" to is right to initiate enforcement action against Pantaloon if any of the representations made by the company is later found to be untrue or incomplete or if the company breaches any of the consent terms or undertakings.


SEBI had imposed penalty on Pantaloon in October 2011 after it found that large number of grievances were pending for more than six months against it as on 30 June 2010. The company was asked to redress these grievances and submit an Action Taken Report within a stipulated time, but it failed to do so and therefore necessitate an action, the regulator had said at that time.



Vaibhav Dhoka

4 years ago

It is perfect submission that SEBI's consent order is eyewash.The punishment in terms of fine should actually be deterrent so that the crime should not be repeated.Here with SEBI this mechanism is like taking holy bath in GANGES.They become pure for past crime and next crime can be done with clean slate.

nagesh kini

4 years ago

SEBI's consent mechanism "without admitting guilt" is an eyewash.
The corporates and their directors under no circumstances should be permitted to get away. It is setting a bad precedent and nothing prevents them from repeating the offense, having got off lightly. Corporates like Pantaloon and the RIL group break the regulations with impunity, knowing full well that they can get away with mere rap on the knuckles and a measly 'settlement'.
Instead each of their Managing and other directors must be fined heavily in their personal capacities and not from company funds, like the SEC does in the US.
These white collared criminals should be jailed too just to drive home the message that they simply can't get away with blue murder!

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Switzerland mulls new bill to check black money flow to banks

Switzerland Federal Council has asked its finance ministry to submit a consultation draft to meet its goal of preventing banks from accepting untaxed funds from their clients

New Delhi/Bern: Often accused of providing safe havens to black money from India and other countries, Switzerland has proposed a new bill to prevent its banks and other institutions from accepting 'untaxed assets' from their clients and put in place a stricter due diligence regime, reports PTI.


The Switzerland Federal Council, the apex decision making body of Swiss government, has asked its finance ministry, the Federal Department of Finance (FDF), to submit a consultation draft at the start of 2013 to meet its goal of preventing banks from accepting untaxed funds from their clients.


A decision to this effect was taken by the Federal Council at a meeting on Friday in Bern.


The move follows rising global pressure on Switzerland to act against its banks giving 'safe haven' to overseas entities in name of client confidentiality.


In India as well, the issue of alleged hoarding of black money in Swiss banks has been a matter of political debate.


While a revised tax treaty has come into force between the two countries for exchange of information on untaxed assets and money laundering related activities, the rules require sufficient information for any banking details to be shared and many requests face the risk of getting rejected in the name of 'fishing expeditions'.


The Swiss Federal Council said in a statement that it "is stepping up its efforts to combat abuses in the area of money laundering and taxation".


"With the planned implementation of the revised recommendations of the Financial Action Task Force (FATF), serious tax offences will be qualified as predicate offences for money laundering in future. In the event that they suspect money laundering, financial intermediaries should also report these cases to the Money Laundering Reporting Office Switzerland," it added.


The Federal Council further said the content of the proposed consultation draft and its schedule would be in line with the implementation of the revised FATF Recommendations.


"At the same time, the Federal Council took note of the FDF's appointment of a group of experts which is to draw up the basis for the longer-term orientation of the financial market strategy," it said.


The new bill incorporates other laws such as tax laws and the Code of Obligations (legislation on companies limited by shares) along with the Anti-Money Laundering Act. Besides, the Swiss government would work on a new set of principles of enhanced due diligence requirements to prevent the acceptance of untaxed assets by banks and other financial intermediaries.


The extent of the examination depends on the risk posed by the contracting party, which would be similar to the due diligence requirements for combating money laundering and terrorist financing. Financial intermediaries will be obliged to issue self-regulation provisions in compliance with specific legal parameters which are to be recognised and monitored by the supervisory authority.


There will also be self-regulation measures equivalent to legal provisions in terms of their impact, while a supervisory authority will be empowered to issue corresponding regulations in the absence of any self-regulation.


"Within the scope of the due diligence requirements to prevent the acceptance of untaxed assets, it is envisaged that the financial intermediary will be able to request a self-declaration from clients on the fulfilment of their tax obligations.


"The self-declaration will serve as an indicator of the tax-compliant conduct of the client. However, there is no self-declaration obligation," the Federal Council said.


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