New Delhi, Nov 14 : The Securities Appellate Tribunal (SAT) has come down heavily on markets regulator, SEBI for not performing its duties and keeping a complaint involving the investment companies of Bennet Coleman and Co., and its managing directors, Vineet Jain and Samir Jain, pending for long.
"We have no hesitation in stating that the SEBI as a regulator in the instant case has not performed its duties and has kept the complaint pending for more than six years which speaks volumes by itself," it said.
SAT has also used strong words to convey the "vested interests" of SEBI officials for not deciding the complaint. "The Tribunal fails to fathom as to why the complaint could not have been decided unless SEBI officials had a vested interest in not deciding the matter," it said.
As per the complaint filed by minority shareholders, BNL, PNBF and Camac hold 24.41 per cent, 9.29 per cent and 13.30 per cent shares respectively in Bennett, Coleman iamp; Co. Ltd. ('BCCL') which is alleged to be India's largest media conglomerate.
Vineet Jain and Samir Jain, respondent nos. 5 and 6, are the Managing Directors of BCCL through inheritance and the complaint contended that it is the case of the appellants that the companies - respondent nos. 2, 3 and 4 - are under the effective control of the Jains and their family members.
Vineet Jain and Samir Jain exercise control over BCCL by virtue of their ownership/ control of respondent nos. 2, 3 and 4 and eight other entities who are the shareholders of BCCL, they said.
It is the further case of the appellants that since 2013, some of the appellants have jointly or individually filed several complaints before the SEBI, urging it to investigate and take action in respect of two violations.
These include incorrect disclosures being made by BNL, PNBF and Camac regarding their promoter shareholding, thereby failing to disclose the true promoters, and thus failing to comply with minimum public shareholding norms prescribed under applicable securities laws.
The contention of the appellant is that BNL, PNBF and Camac are companies which are owned and controlled by Vineet Jain, Samir Jain and their family members who are the Managing Directors of BCCL, more commonly known as the Times Group.
It was further urged that Vineet Jain and Sameer Jain exercise total control over these three companies and are the ultimate beneficial owners of the Company and have wrongly classified themselves as public shareholders of these companies which facts are so glaring, but for the reasons best known, SEBI has turned a blind eye and has disposed of the complaints in a cursory manner.
Some of the respondents have raised a preliminary objection that the appeal is not maintainable under Section 15T of the SEBI Act, 1992 as no order has been passed. It was urged that an appeal lies only against an order passed by an Authority.
SAT noted in its order "We also find it strange to note that SEBI in the said order/ communication states that the information submitted by the appellants would be analysed and investigation would be made in a holistic manner but, on the other hand, in the same breath, states that SEBI would neither confirm nor deny the existence of any investigation conducted by them."
"We find that before the Delhi High Court, SEBI informed that the matter is under investigation by them. We find it strange that while disposing of the complaint, SEBI would neither confirm nor deny as to whether investigation in the complaint is going on or not," SAT said.
"We find the approach adopted by the respondents to be a strange one. Such computer generated disposal of a serious complaint speaks volume on the conduct of the respondents in treating the minority shareholders in this shabby manner. It seems that the respondents have lost sight of the mandate provided to them under Section 11 of the SEBI Act which mandates SEBI to safeguard the interest of the investors. Disposal of the complaint in this manner in the instant case indicates non-application of mind and non-consideration of the interest of the investors," SAT said in the order.
"We set aside the communication/order passed by the SEBI on the SCORES platform. The appeal is allowed. We direct the appellants to file a consolidated representation/complaint before SEBI annexing the earlier complaints within four weeks from today.
"If such an application is filed SEBI will consider and decide the matter by a reasoned and speaking order within six weeks from the date of the presentation of the complaint along with the certified copy of our order," the order said.