He further stated that the report flagged off nine particular related-party transactions, which it stated were not authorised.
Avantha Group’s Gautam Thapar moved the Securities Appellate Tribunal (SAT) against the Securities and Exchange Board of India’s (Sebi) order barring him from capital markets, claiming that the principle of ‘natural justice was wholly and directly violated’.
After hearing arguments on Friday from Thapar’s counsel, along with representatives from Sebi and CG Power and Industrial Solutions, the tribunal reserved its order. Thapar’s appeal follows an ‘ex-parte’ order from Sebi that debarred CG Power’s ex-chairman Gautam
Thapar from accessing the securities market for alleged irregularities, including diversion of money. The market regulator also barred VR Venkatesh (chief financial officer), Madhav Acharya and B Hariharan (former directors) from capital market.
At Friday’s arguments, Janak Dwarkadas, senior counsel to Gautam Thapar, stated that their case was based on the principle that natural justice was wholly and directly violated. He also indicated that the basis of Sebi’s order was based on an investigation report commissioned by CG Power but full of disclaimers.
He further stated that the report flagged off nine particular related-party transactions, which it stated were not authorised. He claimed, however, that the transactions were in fact run by the Risk and Audit Committee (RAC), which the investigation report made no mention of.
Explaining the timeline of events, Dwarkadas said Sebi began investigations on August 20 and claimed to have met the company officials on August 22. Thereafter, on the 28th, notices were sent to the appellants at different times requesting comments. Dwarkadas claims that the appellants then wrote back requesting more than 24 hours to prove their case that the transactions had been authorised by the RAC but was ignored.
To be sure, at this juncture, the bench noted that in an ex-parte order, it was not required to give the appellant an opportunity to present their case.
The parties have 21 days to file their replies to the order.