SEBI reiterates: Failure to obtain SCORES authentication within the stipulated time, amounts to violating the directions of SEBI
The Securities and Exchange Board of India (SEBI) has imposed a penalty of INR 1 Lakh on the Noticee i.e. Suman Motels Limited in terms of the provisions of section15HB of the SEBI Act, 1992.
Herein, SEBI had issued a Circular no CIR/OIAE/2/2011 for obtaining authentication on SEBI Complaints Redress System (SCORES)for processing investor complaints received by SEBI and advised all companies whose shares are listed on various stock exchanges to comply with the provisions of the said circular.
Thereafter, SEBI issued another Circular no. CIR/OIAE/1/2012 advising all listed companies to obtain SCORES authentication by September 14, 2012.Subsequently, SEBI, vide Circular no. CIR/OIAE/1/2013directed the listed companies which had not obtained to obtain the SCORES user id and password to do the same. The circular further stated that failure to obtain SCORES user ID and password within 30 days of issue of the circular, would be deemed to be wilful avoidance of the same.
Further, SEBI Circular no CIR/OIAE/1/2014 consolidated the aforesaid three circulars and rescinded the said circulars. However, it was clarified that notwithstanding such rescission, anything done or any action taken or any failure to take action under those Circulars before the date of issuance of this Circular, shall be deemed to have been done or taken or commenced under the provisions of this Circular.
SEBI had earlier observed that the Noticee had failed to obtain the SCORES authentication and had also failed to redress investor grievance and thereby failed to comply with the aforesaid SEBI Circulars. SEBI initiated adjudication proceedings against the Noticee and the Adjudicating Officer (AO) passed an ex-parte order imposing a penalty of Rs. 1lakh on the Noticee for the violation of aforesaid SEBI Circulars.
The said adjudication order was challenged by the Noticee in the Hon'ble Securities Appellate Tribunal (SAT) and the matter was remitted to the AO of SEBI to decide the matter afresh after giving an opportunity of hearing to the appellant.
The AO has observed that being a listed company, the Noticee was obligated to comply with the directions of SEBI in respect of obtaining SCORES Authentication and also redressal of investor complaint.
It was also stated that due to insufficient evidence regarding the investor complaint pending against the Noticee, the allegation against the Noticee regarding non redressal of the investor complaint did not stand established.
With regard to the allegation of not obtaining SCORES authentication, the AO noted that despite repeated reminders by SEBI through various circulars, the Noticee did not pay heed to the same. It was obligatory on the part of the Noticee to obtain SCORES authentication within the time frame stipulated by SEBI. It was observed that the Noticee had consistently failed and neglected to comply with the afore-mentioned SEBI Circulars.
Hence, it was concluded that the allegation of non-obtaining of SCORES Authenticationin stipulated time stood established against the Noticee and therefore, the Noticee had violated the aforementioned Circulars of SEBI.