New Delhi: Sebi will pass a fresh order in a case of alleged manipulative share trade involving Gujarat Chief Minister Vijay Ramniklal Rupani’s HUF and 21 others, after its Rs 6.91 crore penalty against them was set aside by the Securities Appellate Tribunal.
The tribunal has "set aside" the penalty order, dated October 27, after hearing an appeal filed by Akash Harishbhai Desai, one of the 22 entities penalised by the regulator for alleged manipulative trading in the shares of Saran Chemicals during the January-June 2011 period.
The individual penalty amount was varied for entities and was Rs 15 lakh in the case of Hindu Undivided Family (HUF) of Rupani, who took over as the chief minister in August 2016 and is currently heading BJP’s campaign for the state’s two-phase assembly polls on December 9 and 14.
In a two-page order, dated November 8 and published on its website on Friday, SAT said "Sebi shall pass fresh order after giving an opportunity of hearing to all the parties".
The appellant and other parties against whom the order was passed have been asked to submit their replies within three weeks from November 8, as per the SAT order.
Noting that the appeal was "taken up by the consent of both the parties", the tribunal said the appellant has submitted that the Sebi order was passed without giving them an opportunity to file their replies and without any personal hearing.
The Sebi counsel told the tribunal that the regulator was "ready and willing to pass appropriate order after giving an opportunity of hearing to the parties" provided they submit their replies within the stipulated time.
Soon after the SAT order was made public, Mr Rupani tweeted, "after six years one officer of Sebi passed an order against 22 persons imposing penalty without even hearing anyone of them including Vijay Rupani HUF".
"In 2011, the share broker of Vijay Rupani HUF had carried out only one transaction which is a minuscule part of the total transactions done by several unconnected entities," he said in another tweet.
Mr Rupani also posted a copy of the SAT order on his Twitter page and said one of such persons against whom the ex parte order was passed approached the tribunal by filing an appeal.
"Having found that none of the persons against whom the Sebi officer has passed an order is even heard, the tribunal has quashed and set aside the said order," he tweeted.
However, the Sebi order mentioned that show cause notices were sent to all 22 entities, including Rupani (HUF), on May 6, 2016.
Sebi noted that there was no reply from Rupani (HUF) with regard to the show cause notice (SCN).
Citing various communications with Rupani (HUF), the order said the noticee through a letter dated June 13, 2016 had "requested for keeping in abeyance the proceedings till Vijay Rupani recovers".