While setting aside orders issued by SEBI, the Tribunal also pulled up the market regulator for delay in finalisation of proceedings against two directors of Denim Enterprises
New Delhi: The Securities Appellate Tribunal (SAT) has set aside orders issued by Securities and Exchange Board of India (SEBI) banning Denim Enterprise Directors BJ Shah and SB Bafna from accessing markets, saying that the market regulator could not establish the charges against the duo, reports PTI.
"....we hold that the appellants (Shah and Bafna) cannot be held guilty of violating regulation 5 of FUTP Regulations.
The order of the Whole-time Member is set aside. In the result the appeals are allowed with no order as to costs," said a two-member bench of SAT.
After a probe into a 'artificial' rise in Denim's share price between November 1999 and March 2000, SEBI had charged the directors with publication of false/misleading information about the company and alleged this led to rise in share prices.
The tribunal said, "On a consideration of the facts and evidences on record, we have to conclude that the Board has not established that the appellants involved themselves or were responsible for making any statement or disseminated any information which is false or misleading."
SAT also pulled up SEBI for delay in finalisation of proceedings against them and observed that it "causes undue hardship to the delinquent in putting forth timely defense".
SEBI had issued notice in April 2009, but the proceedings culminated only in May 2012.
"The proceedings could have been completed within a reasonable period of time, especially when the appellants have been restrained from taking part in market operations," said SAT.
SEBI in May this year had restrained Shah and Bafna from accessing the securities market for two years. They were prohibited from buying, selling or dealing in securities.
The two had contended that they were not involved in the day to day affairs of the company and had no role whatsoever in the alleged publication of misleading information in the newspapers.