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The SEBI observed that Malvica Engineering Limited has failed to redress various complaints pending against it as mandated under the SEBI circulars. The SEBI circulars mandated listed companies to obtain SCORES (SEBI Complaints Redress System) authentication, view the complaints pending and redress them within thirty days of receipt and to submit the Action Taken Report (ATR) in SCORES electronically.
Since the noticee has failed to obtain SCORES verification and to redress investor complaints, adjudicating proceeding under Section 15C and 15HB of SEBI Act, 1992 has been initiated against it.
An adjudicating officer was appointed and a show-cause notice was issued to the noticee at the last known address and also via a digitally signed email. An opportunity of personal hearing was given to the Noticee to appear before the Adjudicating Officer on September 15, 2020, through WEBEX platform but no one appeared for the same.
The Adjudicating Officer was compelled to proceed in the matter against the noticee ex-parte based on available documents and information as the principles of natural justice have been complied with and sufficient opportunities have been provided, which the notice has failed to avail.
The SAT in the matter of Classic Credit Ltd. vs SEBI held that, “the appellants did not file any reply to the second show-cause notice. This being so, it has to be presumed that the charge alleged against them in the show-cause notice were admitted by them.”
Also, in the matter of Sanjay Kumar Tayal &Ors. vs SEBI, the Sat held that, “.. appellants have neither filed reply to show cause notices issued to them nor availed opportunity of personal hearing offered to them in the adjudication proceedings and therefore, appellants are presumed to have admitted charges levelled against them in the show cause notices”.
In the case of Port Shipping Company Ltd. vs SEBI, SAT observed that, “…where a listed company fails to obtain SCORED authentication within time stipulated by SEBI, then it amounts to violating the directions of SEBI and in such case penalty is imposable under Section 15HB of SEBI Act.”
The Adjudicating Officer held that the lapse on the part of the noticee with respect to resolving the complaints is detrimental to the interest of the securities market, thus breaching the regulatory mandate for the speedy redressal of investor grievance. The importance of SCORES cannot be undermined and its sanctity has to be maintained by all the listed companies.
Thus, in the lights of the facts, the notice has failed to obtain SCORES Authentication and also to redress all the investor grievances as required in terms of SEBI Circulars and would be liable for a monetary penalty of Rs. 1,00,000/- under section 15C and 15HB of the SEBI Act.
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