Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Unlawful Assembly Common Object |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Securities and Exchange Board of India Act, 1992 - s.12A & s. 15HA r/w s. 15J - Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practice Relating to Securities Market) Regulations, 2003 - Regulation 3(b}, 3(c), 3(d}, 4(1), 4(2)(a}, 4(2)(e), 4(2)(f), 4(2)(k), 4(2)(r) - ยท Securities Market - Market abuse - Allegations of, against the appellant, who was promoter as well as whole time Director of the company in question - Held: Disclosure and transparency are the two pillars on which market integrity rests - Disclosure of information about companies whose securities are traded on a public market is crucial for accurate pricing of the companies' securities and also for efficient operation of the market - On facts, investors' confidence was eroded and E the market was abused for personal gains and attainments - Directors of the company in question failed in their duty to exercise due care and diligence and allowed the company to fabricate figures and making false disclosures - The Directors "created artificiality" and manipulated financial results of the company resulting in price rise of the scrip of the company and then pledged their shares at artificially inflated prices to raise substantial funds from financial institutions - Clear violation of s. 12A of the SEBI Act r/w Regulations 3 and 4 of the 2003 Regulations which essentially intends to preserve 'market integrity' and to prevent 'market abuse' - Conduct of appellant-Director and other Directors was fraudulent and the practices they adopted, relating to securities, were unfair, which attracted the penalty provisions contained in s. 15 HA r/w s. 15J of the SEBI Act - SEBI rightly restrained the appellant-Director for two years from buying, selling or dealing with any securities, in any manner, or accessing the securities market, directly or indirectly and from being Director of any listed company - Adjudicating officer rightly imposed penalty of Rs.50 lakhs u/s.15HA of the SEBI Act - Maxims - acta exteriora indicant interiora secreta" (meaning external actions reveals inner secrets). Company Law - Listed companies - Corporate Governance and Directors -Obligations of the Directors - Held: Obligations of the Directors in listed companies are particularly onerous - Over-riding obligation of the Directors to approve the accounts only if they are satisfied that they give true and fair view of the profits or loss for the relevant period and the correct financial position of the company. Company Law - Disclosure and Transparency - Requirement of - Held: The Companies Act casts an obligation on the company registered under the Companies Act to keep the Books of accounts to achieve transparency - Disclosure of information about the company is crucial for the accurate pricing of the company's securities and for market integrity - Records maintained by the company should show and explain the company's transactions, it should disclose with reasonable accuracy the financial position, at any time - Accounts to give a true and fair view. Shares & Securities - Market abuse - What is - Effect of 'market abuse' - Discussed. Shares and Securities - Securities market - SEBI, the market regulator - Duty of the SEBI to protect investors individual and collective, against opportunistic behaviour of Directors and Insiders of the listed companies so as to safeguard market's integrity - Duty of Print and Electronic Media. |
Judge | Hon'ble Mr. Justice K.S. Panicker Radhakrishnan |
Neutral Citation | 2013 INSC 287 |
Petitioner | N. Narayanan |
Respondent | Adjudicating Officer, Sebi |
SCR | [2013] 6 S.C.R. 391 |
Judgement Date | 2013-04-26 |
Case Number | 4112-4113 |
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