Order in the matter of Caxton International Ltd
- Order No.WTM/MSS/ISD/76/2010
Ratio decidendi
The rule this decision rests on
A regulatory failure to furnish information that the Board has sought for its investigation is not excused by the fact that the information was later supplied, so the failure remains a relevant consideration in deciding what action to take. Where the information sought has been supplied, though only after a show cause notice was issued, the regulator may dispose of the notice with an advice to respond promptly to future information requirements rather than issue directions under Sections 11(4) and 11B of the SEBI Act, 1992. That course is justified where the noticee gives an undertaking to provide future information and the proceedings have been pending for a long time without an order.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
WTM/MSS/ISD/76/2010 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI CORAM: M. S. SAHOO, WHOLE TIME MEMBER In the matter of Caxton International Ltd. Date of Hearing: September 20, 2010 Appearances: For Noticee: 1) Mr. Somasekhar Sunderashan, Partner, J. Sagar Associates 2) Mr. Paras K. Parekh, Associate, J. Sagar Associates For SEBI: 1) Mr. N. Murugan, Presenting Officer 2) Mr. Debashis Bandyopadhyay, Dy. General Manager 3) Mrs. Preeti Maheshwari, Asstt. General Manager, and 4) Mr. Amitesh Kumar, Asstt. Legal Adviser. ORDER Under Sections 11B and 11(4) of the Securities and Exchange Board of India Act, 1992
1. As part of its investigations into dealings in shares on May 17, 2004, SEBI had called for certain information from Caxton International Limited (Caxton). On failure to receive these information despite repeated attempts, SEBI issued a show cause notice dated November 24, 2004 (SCN) calling upon Caxton to show cause as to why directions under Sections 11(4) and 11B of the SEBI Act, 1992 should not be issued.
2. Caxton furnished a detailed reply to the SCN vide its letter dated December 22, 2004. It also availed the opportunity of personal hearing on September 20, 2010 and made oral submission. I have carefully considered the SCN, the reply, the oral submission and other material available on records.
3. The learned Advocate for Caxton reiterated its submission in the reply. He submitted that all along SEBI had sought information through UBS Securities Asia Ltd. and Goldman Sachs & Co through whom Caxton had traded and Caxton had responded to SEBI through them. This could have led to communication gap and consequently inadvertent non-submission of some of the information sought by SEBI. In any case, Caxton is committed to provide any information SEBI needs and has provided most of the information in the reply.
4. I find from records that SEBI had made repeated attempts to get the information. It had even directly written to Caxton seeking the information vide its letter dated October 20, 2004. I also find that Caxton supplied most of the information only after the SCN was issued. Clearly it failed to provide the information sought by SEBI for its regulatory action and one can’t lose sight of this failure.
5. I note that Caxton has provided, albeit after issue of the SCN, the information sought by SEBI. It undertook at the hearing to provide any information that SEBI may need at any time in future. I also note the SCN was issued in 2004 and the matter was heard in 2005 by the then whole time member though no order was passed. Keeping these in view, I dispose of the SCN with an advice to Caxton to respond to information requirements, if any, of SEBI expeditiously in future.
6. This Order shall come into force with immediate effect.
M. S. SAHOO DATE: September 24, 2010 WHOLE TIME MEMBER PLACE: MUMBAI SECURITIES AND EXCHANGE BOARD OF INDIA
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