Appeal No. 101 of 2011. Case: Axis Bank Ltd. Vs Securities and Exchange Board of India. Securities and Exchange Board of India

Case NumberAppeal No. 101 of 2011
CounselFor Appellants: Mr. R. S. Loona, Advocate with Mr. Abhishek Borgikar, Advocate and For Respondent: Mr. Shiraz Rustomjee, Senior Advocate with Mr. Omprakash Jha, Advocate
JudgesN. K. Sodhi, Presiding Officer and P. K. Malhotra, S. S. N. Moorthy, Members
IssueSecurities and Exchange Board of India (Debenture Trustees) Regulations, 1993 - Regulation 13(A)
Judgement DateSeptember 26, 2011
CourtSecurities and Exchange Board of India


N. K. Sodhi, Presiding Officer, (At Mumbai)

  1. Challenge in this appeal is to the order dated March 10, 2011 passed by the adjudicating officer imposing a monetary penalty of Rs. 2 lacs on the appellant for violating, among others, Regulation 13A of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 (hereinafter called the regulations).

  2. The appellant is a private sector bank which quite often acts as a debenture trustee in the securities market. It is registered with the Securities and Exchange Board of India (for short the Board) as a debenture trustee under the regulations. The Board carried out inspection of the books of accounts, documents and other records maintained by the appellant as a registered intermediary. The inspection team found a large number of irregularities including violation of several provisions of the regulations. Adjudication proceedings were initiated against the appellant and a show cause notice dated December 6, 2010 was issued pointing out the alleged violations of regulations. It was alleged that the appellant as a debenture trustee had common directors with the body corporates with whom it had entered into agreements to act as debenture trustees. It was further alleged that the appellant had financial dealings with such body corporates and that it violated, among others, Regulation 13A of the regulations. The appellant filed its detailed reply denying some of the allegations levelled in the show cause notice. On a consideration of the material collected during the course of the inspection and the enquiry conducted by the...

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