SECURITIES AND EXCHANGE BOARD OF INDIA
[Order of Adjudicating Officer under Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 in the matter of Raptakos Brett & Co. Ltd.]
1.1 Bombay Oxygen Corporation Ltd. was incorporated in the year 1962 as a public limited company and is listed on the Bombay Stock Exchange. M/s. Griesheim had come out with an open offer for the takeover of the company, which was announced on June 27, 1997 at an offer price of Rs.3,000/- per share.
1.2 There were allegations that there might have been some purchases by executives/officers of the captioned company just before the AGM when the takeover issue was announced. There were also allegation of fraud by the company in selling of its subsidiary just prior to the takeover thereby affecting the valuation of BOCL and the offer price.
1.3 The company was also in the news for the sale of Raptakos, Brett & Co. Ltd., a nearly wholly owned subsidiary of BOCL to two private companies of the promoters for just Rs.11.25 crores. The minority shareholders aggrieved by this sale filed a case in the Bombay High Court alleging fraud by the promoters.
2.0 Chairman, vide his orders dated October 26, 1998 appointed Smt Usha Narayan, Chief General Manager to inquire into the dealings in the shares of BOCL to find out contraventions, if any, of the following provisions.
a) SEBI (Prohibition of Fraudulent & Unfair Trade Practices relating to the Securities Market) Regulations, 1995.
b) SEBI(Prohibition of Insider Trading) Regulations, 1992
c) SEBI(Stock Brokers and Sub-brokers) Rules and Regulations, 1992
d) SEBI(Merchant Bankers) Rules and Regulations, 1992
e) SEBI (Registrars to an Issue and Share Transfer Agents) Rules and Regulations 1993
f) SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997.
2.1 The Investigating Authority issued a summons to the Managing Director of Raptakos, Brett & Company (hereinafter referred to as Raptakos) on September 5, 2002 to be present before the Investigating Authority on September 12, 2004.
2.2 Raptakos prima facie failed to comply with summons. The undersigned was, therefore, appointed as an Adjudicating Officer under Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 to enquire and adjudge into the alleged violation of Section 15 A of the SEBI Act, 1992 by Raptakos, vide order of Chairman dated 6.11.2003.
3.0 The undersigned issued a show cause notice dated 16.08.2004 under Section 15-I of the SEBI Act, 1992 read with Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 to Raptakos. The contents of the notice are as under:
3.1 Raptakos vide their letter dated August 23, 2004 requested for extension of time for 15 days for submission of their reply. Raptakos subsequently replied vide letter dated September 10, 2004 and stated as under :
1. Raptakos stated that they were surprised to receive a show cause notice almost six years after the event, in relation to which SEBI has alleged lack of compliance on their part.
2. Whilst they reserve their right to provide a detailed response to the show cause notice, they believe that it is necessary for SEBI to have a brief background of what has transpired in the last two years in the matter. In this regard, they invite SEBI’s kind attention to the fact that almost two years ago on receiving a summons from the Investigating Officer, they had respectfully urged upon her to furnish them with the nature of investigation to which her communication and requirements are related. They quoted their letter dated September 9, 2002 as under :
“Since we are unaware of the nature of the investigations, to which you refer, could you enlighten us on the subject so as to enable us to appreciate whether your summons is or is not proper exercise of the powers specified in Section 11 of the SEBI Act”.
3. After well over a month, they received a reply dated October 21, 2002 from the Investigating Officer stating, inter alia, that she was empowered to summon any person or entity who in her opinion was in possession of any information in connection with the investigation which in this case was in connection with the divestment of Bombay Oxygen Corporation Ltd. in Raptakos. They stated that they were clearly informed by the said letter that their presence is required in connection with the divestment of their company by Bombay Oxygen Corporation Ltd.
4. However, from the order dated October 26, 1998 that the authorization reportedly conferred on the said Investigating Officer, ex facie, is in relation to the selling or dealing in shares of M/s. Bombay Oxygen Corporation Ltd. a company listed on the Stock Exchange, Mumbai.
5. They stated that the alleged investigation relating to the selling or dealing in shares of Bombay Oxygen Corporation Ltd. is completely different, both in its applicability and content, from the requirements conveyed to them by the said Investigating Officer, which was expressed to be in relation to the divestment by Bombay Oxygen Corporation Ltd of shares in our company.
6. They stated that it is not only the context of investigation stated by the Investigation Officer that clearly falls outside the authorization dated October 26, 1998 granted to her by the Chairman of the Board but also, arguably, the subject enquiry that would fall outside the powers of SEBI under the SEBI Act.
7. They stated that they furnished detailed replies from time to time and have pointed out that they are not a listed company and therefore called upon the said Investigating Officer to enlighten them on the subject. In the circumstances, they call upon to close the adjudication proceedings initiated through the show cause notice.
8. Raptakos stated that the function of SEBI is amply served by looking at investor protection in its totality. Instead, in a recent decision in the case of Reliance Industries Limited, the Securities Appellate Tribunal was pleased to hold that SEBI cannot base its decisions merely on technicalities.
9. The show cause notice threatens to levy a monetary fine which is nothing but a penal action. Hence they invite SEBI’s attention to the decision of the Supreme Court in Hindustan Steel Limited v. The State of Orissa (1972) 83 ITR 26 in which the Apex Court held as follows :
“An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi criminal proceeding, and the penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of the law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute”.
10. Raptakos stated that the Supreme Court held that penal action is warranted only if an action or conduct is contumacious in nature. The Supreme Court took pains to point out that the technicalities cannot be the basis for any penal action. It is unfortunate that despite our calling upon the said Investigating Officer to let us have the nature of the enquiry, she misled them by informing them that the enquiry related to the divestment of shares by Bombay Oxygen Corporation Ltd in our company, whereas they only now know, the authority for investigation related to a completely different subject.
11. Therefore, they requested to close the adjudication proceedings. They further requested for a personal hearing in the event SEBI is disinclined to close the adjudication proceedings.
4.0 After considering the reply of Raptakos dated 10.9.04, the undersigned issued a notice dated 15.9.04 under Rule 4 (3) of SEBI (Procedure for Holding Inquiry) Rules, 1995, giving an opportunity for hearing on 29.9.04 at 11.30 a.m.
1. Raptakos, vide communication dated 24.9.04 authorised Mr Jagdish C Vora, Chartered Accountant to act, appear and plead on their behalf at the hearing. Shri Vora appeared on behalf of Raptakos and stated that they wanted time to address the substantive issues involving the show cause notice. Hence the matter was posted to 19.10.04 at 11.30 a.m and the notice was dispensed with.
2. Raptakos, vide communication dated 29.9.04 appointed Shri Vivek Menon, Advocate, High Court, Mumbai to appear, act, plead and receive or pay money on their behalf in the above case.
3. Shri Vivek Menon along with Shri J.C. Vora appeared before the Adjudicating Officer on 19.10.2004 and made the following submissions.
4. Shri Menon stated that the investigating authority appointed under order dated 26th October 1998 had no powers to issue the summons dated 5th September 2002. He stated that in the letter dated 21st October, 2002 the presence of the noticee was required in connection with the divestment “of your company” by Bombay Oxygen Corporation Ltd... He stated that the order dated 26th October, 1998 empowered the investigating authority to inquire into the affairs relating “to buying, selling or dealing in shares of M/s. Bombay Oxygen Corporation Limited”.
5. Shri Menon relied upon the case Hemant S. Sonawala (HUF) vs SEBI “[2002] 40 SCL 629 (SAT – MUM.) (para 53).
6. Without prejudice to the above argument, Shri Menon had contended that the noticee cannot be an intermediary under section 12 of SEBI Act since it is not required to be registered. Further, to summon the noticee under Section 11 (1) of the SEBI Act the investigation authority requires proper authorization by the Board.
7. Shri Menon further stated that at no stage they refused to furnish information to the investigating authority and that they were always promptly responding to the correspondence of the investigating authority. The noticee sought certain material information to ascertain their obligation in law before passing the information.
8. Commenting on the nature of information sought by the investigating authority, Shri Menon stated that the information is available in the public domain and that they were not in exclusive possession of the same.
9. Shri Menon further pointed out the inordinate delay in seeking the information. He stated that whereas the order of the Chairman appointing the investigating authority dated 26th October 1998 the notices and the summons were issued in September and October 2002 which is more than 4 years after appointment.
10. Without prejudice to the above submissions, Shri Menon stated that Section 15 A of the SEBI Act as amended is not applicable to the present case since the cause of action has first arisen on 5th September 2002 when the summons was issued.
5.0 I have considered the summons, the charges and the replies thereof of of Raptakos and the submissions, documents. Raptakos is a nearly wholly owned subsidiary of BOCL. Investigation was also initiated for alleged fraud by the promoters of BOCL in the sale of its subsidiary to two private companies of the promoters for just Rs.11.25 crores., thus affecting the valuation of BOCL and the offer price. The issues that arise for consideration in this matter are as under:
5.1 Raptakos contended that as per the order of the Chairman, SEBI appointing the investigating authority, the appointment was only to enquire into the affairs relating to buying, selling or dealing in the shares of BOCL. But the summons was issued to Raptakos for being present before the Investigating Authority in connection with the divestment of Raptakos by BOCL. Raptakos vehemently contended that the Investigating Authority had misused the authorization given to and was trying to seek information by misleading it. Raptakos further contended that they were not an intermediary covered under Section 12 of SEBI Act, 1992. They also contended that they were not persons associated with securities market. They, therefore, stated that they were not legally obliged to reply to the summons of the Investigating Authority.
5.2 In this connection, the order appointing Investigating Authority referred above is worth examining. The order dated 26/10/1998 signed by the then Chairman, Shri D.R. Mehta, appointed Smt. Usha Narayanan as Investigating Authority to “to inquire into the affairs relating to buying, selling or dealing in shares of M/s. Bombay Oxygen Corporation Ltd submit a report to the Board at the earliest”. The said order was issued to ascertain whether any provisions of the SEBI Act, 1992 and various Rules and Regulations made thereunder have been violated.
a. whether there are any circumstances which would render any person guilty or having contravened any of the regulations of the SEBI (Prohibition of Fraudulent Unfair Trade Practices relating to the Securities Market) Regulations 1995;
b. whether any provision of the SEBI (Insider Trading) Regulations 1992 have been violated by any person who is an insider or any person who is deemed to be an insider or connected person; and
c. Whether any person who is a stock broker is guilty of having contravened the provisions of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992, framed thereunder.
d. Whether any Merchant Banker is guilty of having contravened the provision of the SEBI Act, 1992 or the SEBI (Merchant Bankers Rules and Regulations) 1992 framed thereunder.
e. Whether any Registrar or a share transfer agent has violated any provision of the SEBI Act, 1992 or The SEBI (Registrars to an Issue and Share Transfer Agents) Rules and Regulations 1993 framed thereunder.
f. Whether any violations of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 has taken place.
It is also clear from the said order that the same was passed under regulation 7 of SEBI (Prohibition of Fraudulent Unfair Trade Practices relating to the Securities Market) Regulations 1995, Regulation 5 of SEBI (Insider Trading) Regulations 1992, regulation 38 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
5.3 Regulation 40 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 cast upon the obligations of persons in general in case of an investigation as under:
Obligations on investigation by the Board
40. (1) It shall be the duty of the acquirer, the seller, the target company, the merchant banker whose affairs are being investigated and of every director, officer and employee thereof, to produce to the investigating officer such books, securities, accounts, records and other documents in its custody or control and furnish him with such statements and information relating to his activities as the investigating officer may require, within such reasonable period as the investigating officer may specify.
(2) The acquirer, the seller, the target company, the merchant banker and the persons being investigated shall allow the investigating officer to have reasonable access to the premises occupied by him or by any other person on his behalf and also extend reasonable facility for examining any books, records, documents and computer data in the possession of the acquirer, the seller, the target company, the merchant banker or such other person and also provide copies of documents or other materials which, in the opinion of the investigating officer are relevant for the purposes of the investigation.
(3) The investigating officer, in the course of investigation, shall be entitled to examine or to record the statements of any director, officer or employee of the acquirer, the seller, the target company, the merchant banker.
(4) It shall be the duty of every director, officer or employee of the acquirer, the seller, the target company, the merchant banker to give to the investigating officer all assistance in connection with the investigation, which the investigating officer may reasonably require. (emphasis supplied).
5.4 Regulation 9 of SEBI (Prohibition of Fraudulent Unfair Trade Practices relating to the Securities Market) Regulations 1995 reads as under:
Duty to produce records, etc.
9. (1) It shall be the duty of every person in respect of whom an investigation has been ordered under regulation 8 to produce to the Investigating Officer such books, accounts and other documents in his custody or control and furnish him with such statements and information as the said officer may reasonably require for the purposes of the investigation.
(2) Without prejudice to the generality of the provisions of sub-regulation (1), such person shall -
(a) allow the Investigating Officer to have access to the premises occupied by such person at all reasonable times for the purpose of investigation;
(b) extend to the Investigating Officer reasonable facilities for examining any books, accounts and other documents in his custody or control (whether kept manually or in computer or in any other form) reasonably required for the purposes of the investigation;
(c) provide to such Investigating Officer copies of any such books, accounts and records which, in the opinion of the Investigating Officer, are relevant to the investigation or, as the case may be, allow him to take out computer outprints thereof.
(3) The Investigating Officer shall, for the purpose of investigation, have power to examine orally and to record the statement of the person concerned, any director, partner, member or employee of such person.
(4) It shall be the duty of every person concerned, to give to the Investigating Officer, all such assistance and otherwise extend all such co- operation as may reasonably be required in connection with the investigation and to furnish information relevant to such investigation as may be reasonably sought by such officer.
5.5 Further, Regulation 7 of SEBI (Insider Trading) Regulations 1995 reads as under:
Obligations of insider on investigation by the Board
7. (1) It shall be the duty of every insider, who is being investigated, to produce to the investigating authority such books, accounts and other documents in his custody or control and furnish the authority with the statements and information relating to the transactions in securities market within such time as the said authority may require.
(2) The insider shall allow the investigating authority to have reasonable access to the premises occupied by such insider and also extend reasonable facility for examining any books, records, documents and computer data in his possession of the stock- broker or any other person and also provide copies of documents or other materials which, in the opinion of the investigating authority are relevant.
(3) The investigating authority, in the course of investigation, shall be entitled to examine or record statements of any member, director, partner proprietor and employee of the insider.
(4) It shall be the duty of every director, proprietor, partner, officer and employee of the insider to give to the investigating authority all assistance in connection with the investigation, which the insider may be reasonably expected to give.
5.6 It is, therefore, obvious from the above that every person concerned with the matter is under obligation to give information as sought by the Investigating Authority. The decision to call for such information and the judgment as to its relevancy is completely at the discretion of the Investigating Authority. Therefore, it is difficult to agree with Raptakos that Investigation Officer has no authority to call for the information from them. Admittedly, the subject investigation was under both takeover and insider trading regulations. The company involved is BOCL. The information as to divestment of Raptakos by BOCL is certainly a relevant information in an investigation into alleged takeover violations and insider trading violations. The divestment is price sensitive information within the meaning given to it under insider trading regulations. The divestment also has its own significance from the takeover angle since it has an impact on the price determination. Therefore, I hold that the information sought for by the Investigating Authority vide summons mentioned above is within her authority.
6.0 The next issue that arises is whether the Raptakos is required to be an intermediary under 12 of SEBI Act, 1992 to be summoned by an Investigation Officer. From a plain reading of provisions of regulations cited above, it is obvious that a person need not be an intermediary to investigate into. If a person is suspected of being in possession of relevant information, the Investigating Authority will have powers to call for such information from such person. In case of Karnavati Fin Cap Vs SEBI it has been held that a company is also a person associated with Securities Market. In any case, the Raptakos fall within the purview of the authority of Investigating Authority for the reasons stated above. Therefore, I hold that Raptakos is legally bound to give information as sought by the Investigating Authority. Therefore, the ratio in the case of Hemant Sonawala Vs SEBI [2002] 40 SCL 629 is of no relevance in this matter.
6.1 The next issue that arises is whether the Raptakos has violated Section 15 A of SEBI Act, 1992. I have noted that the Investigating Authority vide summons dated 05/09/2002 required the Managing Director of Raptakos to appear on 12/09/2002 before the Investigating Authority and produce the documents listed in the annexure. The said annexure contained the following:
1. Names of Directors during the year 1996
2. Details of shareholders holding 5% and above viz., name, address, father’s name, etc.
3. Current address of Kunal Pharmaceuticals (P) Ltd.,
6.2 In this context I have noted that the annexure did not have the necessary clarity as to the name of the company for which Investigating Authority was seeking information about. I have noted that the Raptakos replied vide letter dated 09/09/2002 interalia as under:
“3. Your Summons required production of documents, which is wholly unclear to us, as will be evident from the following:
You ask for names of Directors during the year 1996. Whose Directors: of Bombay Oxygen Corporation Ltd, or our Company? If it is the former, surely, the information would be available to you through the Stock Exchange which has all information including the one that is sought by you. If, on the other hand, it be the latter, would you kindly clarify as to how you have assumed jurisdiction of Investigating into the directorship of unlisted companies?
You ask for details of shareholders holding 5% and above. Whose shareholders: of Bombay Oxygen Corporation Ltd or our Company? If it be the former, perhaps issuing a Summons to the Managing Director of another unlisted company to seek information which is readily available in the records of the Registrar of Companies would be, with great respect, an abuse of powers. If, on the other hand, it be the latter, once again, since we are an unlisted Company, we are unable to appreciate the rationale for asking for information concerning an unlisted company and its owners.
Item 3 in the Annexure asks for the current address of “Kunal Pharmaceuticals Pvt Ltd.,” Once again, we are unable to understand the relevance or otherwise of this information. Surely, it is not the task of a regulatory body in-charge of listed companies to ask for information concerning any and every unlisted company.
6.3 I have further noted that the Investigating Authority has replied to the said letter as under:
“In this connection we may inform you that the Investigating Officer is empowered to summon any person or entity (listed or unlisted), who in the opinion of the Investigating Officer is in possession of and can furnish information in connection with the investigation. Under the SEBI Act, a person summoned is under obligation to appear before the Investigating Authority and co-operate. Your presence is required in connection with divestment of your company by Bombay Oxygen Corporation Ltd.”
As regards the details called for, since the summons has been addressed to you, whatever information called for is with reference to Raptakos, Brett & Co. Ltd. You are, therefore, advised to be present before the undersigned on October 28, 2002 at 3.00 p.m. with the following details:”
6.4 However, instead of furnishing the information sought by the investigation officer, Raptakos vide letter dated 25.10.2002 further contented that:
“Having noted that these issues relate to divestment of shares of our company by Bombay Oxygen Ltd., we have taken liberty of eliciting information from Bombay Oxygen ltd. and have received response dated 25.10.02, a copy of which is enclosed.
As you will observe there from, the divestment took place more than 6 years ago, has been approved by the Board of Directors of the company, reflected in the audited accounts of that company in its Financial Statement and Directors Report (in which full disclosure has been made) which are unanimously approved by the shareholders of the company.
With great respect, we submit the fountainhead of SEBI’s functions and powers in investors’ protection. May we also add that the alleged query being presented at this point of time after 6 years seek information that could be readily available from the records of the Registrar of the company?
Under the circumstances we believe that your pursuing the line may need some amplifications and it is for that reason that we request you to kindly provide the following information:
§ The particular Section 4 of SEBI Act under which the Board reportedly ordered the enquiry.
§ Certified True Copy of that decision as also your being so appointed as, you say, the investigation officer.
§ Since to refer to certain consequence under SEBI Act by citing Section 15B and Section 24 may we point out that an impartial watchdog ought to consider whether the inquiry needs to be pursued, especially when SEBI is over burdened with huge backlog?”
6.5 It is therefore noted that Raptakos did not give information, but sought further clarification from the Investigation Officer. It is not clear from the file as to why the Investigation Officer did not give them further chance to furnish information as sought in the summons. It is also not clear whether the said letter was replied by Investigation Officer at all. I therefore hold that there is merit in the argument of Raptakos that they never refused to give information and that there was no failure. I have noted that Investigation Officer had not given any reasons for not reminding the Raptakos further for the said information and that it was simply assumed that the information would not be furnished by the Raptakos and proceeded to submit the Investigation Report.
6.6 I further see that the omission if any is not of repetitive in nature since from the time of seeking information by the Investigation Officer, Raptakos was asking for further details to give information, albeit with a mischievous tone. There is nothing on record to show that Raptakos got any unlawful gains out of this commission or omission, if any.
6.7 I have further noted that the information sought for from Raptakos is not available exclusively with Raptakos. The non furnishing of such information is therefore can not be said to have caused any loss to anybody or hampered the investigation process. Further, there is nothing on record to prove that the information was deliberately and malafidely suppressed by Raptakos. This is one of the criteria laid down by the Hon'ble Tribunal in Appeal no 148/ 2003 filed by Silverline Holdings Corporation and others Vs Securities and Exchange Board of India. I, therefore, hold that the Raptakos is not guilty of failure to furnish information to the Board as stated under section 15A of SEBI Act, 1992.
6.8 I, however, place on record the reckless tenor of the letters in which they were addressed by Raptakos to Investigation Officer. I have noted that the correspondence on behalf of Raptakos was signed by a Company Secretary. Being a professional, especially in corporate law field, the said company secretary should have realized that the securities market regulator deserves respect and that his letter should be in appropriately polite manner. The Company Secretary should have noted that summons seeking information from a regulator are not stigmatic and are in fact in furtherance of discharge of official duties of Investigating Authority and that noticee under summons is under legal and moral obligation to cooperate with Investigating Authority and furnish information without playing hide and seek as above. I have noted that Raptakos unnecessarily took offence to the summons issued by the Investigation Officer. The information sought by the Investigation Officer is not apparently confidential and therefore it is more incumbent upon Raptakos to have complied with the summons without entering into the correspondence as above. In this connection the judgment of the Hon'ble High Court of Bombay in the Writ Petition No.1972 of 1994 filed ANZ Grindlays and others which held inter alia as under is worth noting:
“No person can maintain the dignity or cherish prestige by avoiding due process of law. Law being a guardian, it maintains and protects the dignity and honour of every person. Dignified and honourable persons have to stand the test and trial articulated by Law. And in obedience, he or she has to submit to the process. Cherishing majesty of law and its process is a inner core of the dignity of individual in a Democratic World, which runs on the wheel of Rule of Law.”
The following excerpts from the letters of Raptakos cited above exemplify the arrogance exhibited by Company Secretary.
“You ask for details of shareholders holding 5% and above. Whose shareholders: of Bombay Oxygen Corporation Ltd or our Company? If it be the former, perhaps issuing a Summons to the Managing Director of another unlisted company to seek information which is readily available in the records of the Registrar of Companies would be, with great respect, an abuse of powers. If, on the other hand, it be the latter, once again, since we are an unlisted Company, we are unable to appreciate the rationale for asking for information concerning an unlisted company and its owners.”
“Surely, it is not the task of a regulatory body in-charge of listed companies to ask for information concerning any and every unlisted company”
“With great respect, we submit the fountainhead of SEBI’s functions and powers in investors’ protection. May we also add that the alleged query being presented at this point of time after 6 years seek information that could be readily available from the records of the Registrar of the company?”
“Since to refer to certain consequence under SEBI Act by citing Section 15B and Section 24 may we point out that an impartial watchdog ought to consider whether the inquiry needs to be pursued, especially when SEBI is over burdened with huge backlog?” (emphasis furnished)
6.9 While it is appreciated that noticee has right to seek information on the authority of the person issuing summons, it is wholly unnecessary and needless to sermonize the Investigation Officer on the objects, powers and functions of SEBI. While it is not appropriate to find fault with Raptakos for the unprofessional way in which letters were addressed by its Company Secretary, it is advisable for Raptakos to prevail upon the Company Secretary to be accommodative and responsive with professional responsibility to the regulatory requirements of the Regulators.
7.0 On consideration of above factors and the evidence produced before me I am satisfied that Raptakos has not become liable to pay penalty under section 15 A of SEBI Act, 1992 and hold that this is not fit case for imposing penalty under section 15 A of SEBI Act, 1992.
As required under Rule 6 of the said Rules, 1997 a copy of the instant order is being sent to Raptakos and also to SEBI.
| Date: NOVEMBER 02, 2004 |
KRCV Seschachalam |
| Place: Mumbai |
Adjudicating Officer |
