One Sebi prosecution cases dismissed for every two convictions

Written by Markets Bureau | Mumbai, Apr 28 | Updated: Apr 29 2008, 08:53am hrs
The Securities and Exchange Board of India (Sebi) has suffered a major setback in some of the cases it had filed for prosecution in the various special courts spread across the country. As per the data made available by the regulator on its website, there were 26 cases as on March 31, 2008, where prosecution proceedings filed by Sebi were dismissed by the different courts. However, in some of the cases, where the proceedings were dismissed, the regulator has moved to higher courts in appeal. Moreover, another important aspect of the data is that the number of cases where cases resulted in conviction (56) were more than double that were dismissed.

The Sebi data showed that the number of cases resulting in compounding in prosecution was also on rise as 45 cases resulted in compounding and that resulted in Sebi receiving Rs 144 lakh as fine. Another interesting aspect of the Sebi data is that in 19 cases where prosecution proceedings were launched that resulted in accused being declared as proclaimed offender and interesting aspect is that all the cases were related to plantation companies.

According to informed sources, Sebi will not receive penalty from the parties involved in the cases but will also earn legal charges, which may range from 15-20% of the total penalty as the legal charges from the parties. The penalties levied for compounding the charges will be received by Sebi .Some of the high profile cases that were dismissed included the case against BPL Ltd & others, Rajiv Chandrashekhar, Harshad Mehta and others in the infamous BPL Ltd case of Insider Trading of 1998. Among other cases where prosecution filed by Sebi were dismissed are Mahadeo Leasing, scores of plantation companies, Soundcraft Industries and its promoter Rajkumar Basantani, Design Auto, Shrikant G Mantri, Harvest Deal Securities, Rajnedra Kumar Banthia and First Custodian.