Order in the matter of Baba Arts Ltd
- Order No.WTM/RKA/OIAE/126/2014
Ratio decidendi
The rule this decision rests on
Where an investor grievance that a listed company failed to redress within the period prescribed by SEBI's SCORES circular has in fact been disposed of before the show cause process is concluded, and is no longer pending, there is no need to issue a direction under section 11B of the SEBI Act against the company or its directors, and the show cause notices are disposed of. Where the company and its directors have explained the lapse and the grievance has been resolved, the matter may be closed with an advisory that they take utmost care and vigilance in future redressal of investor grievances, in place of a restraint on accessing the securities market.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
WTM/RKA/OIAE/126/2014 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under section 11B of the Securities and Exchange Board of India Act, 1992 in the matter of Baba Arts Ltd. In respect of Baba Arts Ltd. and its directors namely, Mr. Sanjiv Laximchand Hinduja, Mr. Gordhan Prabhudas Tanwani, Mr. Santosh Anilkumar Shah and Pravin Jivanlal Karia. 1. Baba Arts Ltd. (hereinafter referred to as "the company") is a company incorporated under the Companies Act, 1956 having its registered office at 3A Valecha Chambers, New Link road, Andheri (West), Mumbai 400 053. The shares of the company are listed on Bombay Stock Exchange Ltd. 2. SEBI vide circular no. CIR/OIAE/1/2012 dated August 13, 2012 directed all companies whose securities are listed on stock exchanges to obtain SCORES authentication by September 14, 2012 and to take appropriate necessary steps within seven days of receipt of investor complaints by the concerned company through SCORES, so as to resolve the investor complaints within 30 days of receipt of complaint. 3. It was observed that the company obtained SCORES authentication but failed to redress one investor grievance. Accordingly, SEBI issued Show Cause Notices (SCNs) dated March 28, 2013 and April 18, 2013 to the company and its directors, namely, Mr. Sanjiv Laximchand Hinduja, Mr. Gordhan Prabhudas Tanwani, Mr. Santosh Anilkumar Shah and Pravin Jivanlal Karia, respectively. The SCNs called upon them to show cause as to why suitable directions including the direction to restrain them from accessing the securities market for a specified period should not be issued under section 11B of the SEBI Act. 4. In response to the SCNs, the directors of the company vide letters dated May 07, 2013 replied inter alia that all efforts were made by the company to ensure that all the investor grievance were attended. Subsequently, the company filed the Action Taken Report on SCORES for the pending investor grievance as referred in the SCNs and the investor grievance was disposed of on May 07, 2013. 5. I have considered the SCNs, replies there to and other material available on record. I note that the investor complaints as referred to in the SCNs have been disposed of and are no longer pending.
In the matter of Baba Arts Ltd.
6. Considering the above facts and circumstances of the case, I am of the view that there is no need to pass any direction under section 11B of the SEBI Act against Baba Arts Ltd. and its directors as contemplated in the SCNs issued to them. The SCNs are accordingly disposed of. However, they are advised to take utmost care and be vigilant in future, in respect of redressal of investor grievances.
Date: October 27th, 2014 RAJEEV KUMAR AGARWAL Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA
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