SEBI barring 2 company's from accessing capital market under SC gaze
August, 28th 2009
Securities and Exchange Board of India (SEBI) has asserted before the Supreme Court that it has the power to ban the companies and brokers from accessing the capital market in public interest as being the regulator of the share market.
SEBI was responding to the appeal filed by the two companies Bonanza Biotech Limited (BBL) and Design Auto System Limited (DASL).
The two companies were debarred for seven years from trading in the stock market and SEBI also imposed a fine of Rs one crore on the two companies.
Securities Appellate Tribunal had upheld the order of the SEBI which was passed under section 11(B) of SEBI Act 1992 to protect the interest of the investors.
From August 2001 to January 2002, DASL had issued ten crore preferential shares in favour of BBL which had Demat account and therefore it was not possible for the investor to find out whether the entry of the share in Bombay Stock Exchange (BSE) was authorised or not. A total of 98,21,074 shares were listed for trading by these companies in the share market.
The Supreme Court is examining the validity of the order of the SEBI from debarring the two companies for seven years from the share market. The order was passed by SEBI on March 6, 2007.