Interim order in the matter of Yogesh Mehta Vs. SEBI and Others

WTM/KMA/IVD/262/06/2010 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: DR. K. M. ABRAHAM, WHOLE TIME MEMBER ORDER INTERIM DIRECTION UNDER SECTIONS 11 AND 11B OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 PURSUANT TO THE ORDERS OF HON’BLE SECURITIES APPELLATE TRIBUNAL IN APPEAL NO. 45 OF 2008 IN THE MATTER OF YOGESH MEHTA Vs. SECURITIES AND EXCHANGE BOARD OF INDIA AND OTHERS 1. The Hon’ble Securities Appellate Tribunal (hereinafter referred to as the Hon’ble SAT) disposed of the appeal filed by Mr. Yogesh Babulal Mehta Vs Securities and Exchange Board of India & ors (Appeal No. 45 of 2008), vide order dated September 16, 2008 with the direction “We have heard the learned counsel for the parties and perused the two orders dated 16.5.1998 and 15.6.1999. When the order dated 16.5.1998 was passed, the appellant was not heard and since the two are contradictory, we set aside both of them insofar as they relate to the appellant and respondents 3 to 6. The case is remanded to the Board to pass a fresh order in accordance with law after affording an opportunity of hearing to all the parties. ………………………….It is needless to mention that it shall be open to the Board to call for such additional records and information from the parties as it may deem necessary for deciding the dispute between them. …….” Thereafter, vide Order dated May 13, 2010, the Hon’ble SAT (in the Miscellaneous Application No. 36 of 2010 in Appeal No. 45 of 2008) directed the Securities and Exchange Board of India (hereinafter referred to as SEBI) to take a final decision in compliance with its Order dated September 16, 2008 and pass an appropriate order in accordance with law expeditiously but not later than June 30, 2010.

2. Pursuant to the aforesaid Orders, SEBI granted an opportunity of hearing to Mr. Yogesh Babulal Mehta on May 18, 2010 and Bombay Stock Exchange Limited (hereinafter referred to as BSE) on June 3, 2010. An opportunity of hearing was also granted to the four clients of Mr. Yogesh Babulal Mehta, namely, Ms. Smita Nagda, Mr. Atul Patira, Ms. Rita Patira and Mr. Deepak Seth on June 3, 2010. Though, Ms. Smita Nagda acknowledged the receipt of the hearing notice, she failed to appear on the said date. After hearing the parties as stated above, I am of the view that the issue for consideration in the matter is to find out as to who is entitled to receive the money from BSE. During the course of hearing on June 3, 2010, Mr. Pesi Modi, the learned counsel appearing for BSE submitted that BSE had made the payments (vide cheques drawn on State Bank of Mysore, Mumbai) to Ms. Smita Nagda, Mr. Atul Patira, Ms. Rita Patira and Mr. Deepak Seth, as per the details given below:

Cheque Number Date Amount Payee 563847 01/01/2001 1,90,800 Ms. Smita Nagda 227686 26/07/2000 5,51,200 Mr. Atul Patira 227687 26/07/2000 5,56,500 Ms. Rita Patira 227688 26/07/2000 74,200 Mr. Deepak Seth

3. Therefore, in the interest of justice, it is appropriate to obtain a certificate of remittance showing the recipients of such payments from the State Bank of Mysore, Mumbai, for a fair and better consideration of the matter. In this regard, the learned counsel for BSE requested SEBI to pass an interim direction so that BSE could take further steps expeditiously.

4. In view of the foregoing, I, in exercise of powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11 and 11B thereof, by way of an interim direction, hereby direct Bombay Stock Exchange Limited to obtain a certificate of remittance from its bank (State Bank of Mysore) in respect of the payments made by it, as stated in the table at paragraph 2 above.

5. Bombay Stock Exchange Limited shall take all possible steps to obtain such remittance certificate and furnish the same to the Securities and Exchange Board of India by June 15, 2010.

DR. K. M. ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

PLACE: MUMBAI DATE: JUNE 4, 2010