The regulator alleged violation of provisions of Sebi listing rules and the Securities Contracts Regulation Act.
On November 22, 2023, Sebi issued show cause notices to the two applicants. The notice asked why an investigation should not be conducted and why a fine, if any, should not be imposed for the alleged violations.
The applicants’ authorized representatives, Cyril Amarshan Mangaldas, filed replies to the show cause notice on January 16, 2024. They later informed Sebi that the settlement applications were filed in accordance with the Sebi Resolution Procedures Regulations, 2018.
The resolution mechanism allows entities to resolve regulatory proceedings by paying a settlement amount without admitting or denying the outcome, subject to approval in accordance with the applicable resolution rules.
Sebi’s internal committee held meetings with representatives of the petitioners on May 8, 2024 and July 15, 2024, where settlement terms were discussed. The internal committee recommended compensation of Rs 13.65 lakh for each complainant. The claimants then filed revised terms of settlement on July 19, 2024, agreeing to pay the amount recommended by the committee.
The High Advisory Committee, in its meeting held on June 29, 2026, recommended settlement of the case by payment of Rs 13.65 lakh by each complainant. The recommendation was approved by the Sebi Standing Members Committee on August 13, 2026. Sebi communicated the approval to the petitioners’ representatives on August 14. Later on September 5, representatives informed Sebi that the settlement amount had been transferred. The order stated that the materials on record confirm receipt of the amount by Sebi.
By accepting the settlement terms and receiving the money, Sebi concluded the proceedings initiated on the show cause notice.
Sebi, however, said the resolution decision is without prejudice to its right to take action under Regulation 28 of the Settlement Regulations. This includes reinstating or initiating proceedings if any statement made by the claimants later turns out to be incorrect, if undertakings or waivers are breached, or if there is any discrepancy in achieving the terms of settlement.
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