The Appellate Tribunal, while pulling up SEBI for its lackadaisical approach, asked the market regulator to issue a show-cause notice to Onelife Capital Advisors within five weeks and pass final order within four months

Mumbai: Pulling up the Securities and Exchange Board of India (SEBI) for its “lackadaisical approach” in holding an inquiry, the Securities Appellate Tribunal (SAT) directed the market regulator to pass a final order in the case related to Onelife Capital Advisors (OCAL) within four months, reports PTI.

The case is regarding alleged irregularities in the utilisation of proceeds from the initial public offering (IPO) by OCAL.

SAT's direction came on a plea from the company and its directors that they have not traded in the capital market for more than a year.

According to the tribunal, SEBI completed its probe in October 2012, but is yet to issue a show-cause notice.

“It needs to be appreciated that if Board (SEBI) feels that the charges are serious enough to keep a market player out of the market, it should complete the proceedings expeditiously,” SAT said in its order.

“This only shows the lackadaisical approach of the Board in holding inquiry against the appellants,” it added.

In its order, SAT directed SEBI to “issue show-cause notice to the appellants within five weeks and pass final order within a period of four months from today”.

“If the Board fails to pass final order within the stipulated period, the interim order passed against the appellants by the Board shall stand vacated without prejudice to the continuation of proceedings,” it said.

Meanwhile, SAT has allowed OCAL’s two independent directors—AP Shukla and Dhananjay Parikh—to sell the shares in their respective demat accounts.

It said that the sale proceeds have to be kept in fixed deposit with a nationalised bank and withdrawal should be with the prior permission of SEBI.

However, SAT has not permitted OCAL's directors -- Thiruvidaimarudur Krishna and Pandoo Naig -- to sell shares held by them.

SAT has also directed the company and its directors to extend full cooperation to SEBI.

SEBI, through an interim order in 28 December 2011, had barred OCAL and various executives from the securities market.

Last week, SEBI had declined to revoke a ban on OCAL and its directors.

The regulator had initiated a probe after the shares of OCAL were issued at premium and the IPO was over-subscribed despite having poor fundamentals.

OCAL came out with an IPO in September 2011 to raise Rs36.85 crore.

Preliminary investigations revealed that OCAL had made mis-statements in the offer documents and had utilised the IPO proceeds for purposes other than the objectives of the share sale as stated in the Red Herring Prospectus.