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.
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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!