SAT appeals in Sebi matters see a jump of 43% in FY22 | The Financial Express

SAT appeals in Sebi matters see a jump of 43% in FY22

The approach adopted by Sebi has often attracted strong remarks from the SAT in the past few years.

SAT appeals in Sebi matters see a jump of 43% in FY22
The SAT has 697 pending appeals against Sebi orders at the end of FY22 compared with 632 the previous year. (File)

The number of new appeals filed against the Securities and Exchange Board of India (Sebi) before the Securities Appellate Tribunal (SAT) rose to 780 at the end of FY22, 43% higher than the previous year. Of these, 383 appeals were dismissed (ruled in favour of Sebi) and 138 appeals were allowed (ruled against Sebi) and in 140 appeals the case was remanded for fresh consideration, data from Sebi’s annual report shows.

Sixty three per cent of the disposed appeals pertained to the violation of provisions of the Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Regulations, 2003; 5% pertained to insider trading and 3% to Sebi (SAST) Regulations, 2011. About 70% of appeals pertaining to insider trading were dismissed and half of the appeals with respect to PFUTP regulations were dismissed.

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The SAT has 697 pending appeals against Sebi orders at the end of FY22 compared with 632 the previous year. The financial year saw the addition of a new technical member at SAT. “The rise in Sebi matters is a reflection of increasing supervision of governance issues. This is bound to increase with ESG/BRSR compliances coming in and will require expert determination of facts and hypothetical scenarios by experts,” said HS Chandhoke, senior partner, DSK Legal.

The approach adopted by Sebi has often attracted strong remarks from the SAT in the past few years. For instance, SAT recently pulled up the regulator for a delay of 12 years in issuing a show-cause notice to an alleged offender and termed the same as ‘judicial dishonesty’.

“The regulator needs to be more vigilant in pursuing its case against the alleged offenders that are often involved in serious white-collar crimes which have a cascading impact on the economic situation of the country,” Suvigya Awasthy, associate partner, PSL Advocates & Solicitors, said, adding that the increasing pendency of cases has become an Achilles’ heel of the Indian legal landscape which can only be resolved by joint efforts of judges, lawyers, and litigants.

A total of 118 cases were filed in the Supreme Court in FY22 compared with 94 in the previous year. Of these, 53 cases were filed by Sebi and another 65 were filed by others. The pendency of the cases increased to 372 from 304 in the previous year.

The high courts saw 208 cases being filed on Sebi matters in FY22, lower than 233 filed the previous year. At the end of FY22, 1,142 cases were pending before the courts.

Sebi received 345 applications for settlement during FY22, of which 107 applications were disposed of by passing appropriate settlement orders while 167 applications were rejected or withdrawn. Sebi collected `58.8 crore from the 107 settled applications. Additionally, a consolidated settlement order was passed against 1,018 entities under the Sebi Settlement Scheme, 2020, which netted `87.4 crore. Another `24.2 crore was collected as disgorgement charges.  

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The time period for filing a settlement application was rationalised to 60 days from the date of receipt of the show-cause notice or a supplementary notice, whichever is later. Sebi completed adjudication proceedings against 2,369 entities involving 546 cases. The proceedings were completed through 919 adjudication orders against 2,317 entities and 23 settlement orders against 52 entities.  

The amount of fees earned by Sebi in FY22 stood at `1,034 crore, up 69.5% over that earned a year ago.

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First published on: 12-10-2022 at 00:45 IST