Adjudication Order No. PJ/VP/26/2017. Case: In Re: Cifco Finance Limited Vs. Securities and Exchange Board of India

Case NumberAdjudication Order No. PJ/VP/26/2017
Party NameIn Re: Cifco Finance Limited Vs
JudgesPrasad Jagadale, Adjudicating Officer
IssueSecurities And Exchange Board Of India Act, 1992 - Sections 11(1), 15 A(a), 15-I, 15-J, 15A(a), 15C, 15I, 15J, 19
Judgement DateJanuary 18, 2017
CourtSecurities and Exchange Board of India

Order:

Prasad Jagadale, Adjudicating Officer

BACKGROUND

  1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") issued Circulars viz., Circular No. CIR/OIAE/2/2011 dated June 3, 2011, Sebi Circular No. CIR/OIAE/1/2012 dated August 13, 2012 and Sebi Circular No. CIR/OIAE/1/2013 dated April 17, 2013 (hereinafter referred to as "SEBI Circulars") dealing with the processing of investor complaints against listed companies through SEBI Complaints Redress System (hereinafter referred to as "SCORES"). In terms of said SEBI Circulars, all listed companies were inter alia required to view the complaints pending against them, redress them and submit Action Taken Reports (hereinafter referred to as "ATRs") electronically in SCORES. It was observed that M/s. Cifco Finance Limited (hereinafter referred to as "Noticee") had failed to redress the investor grievance within the prescribed time that is within 30 days.

  2. In term of the SEBI Circulars, the Noticee was supposed to take appropriate necessary steps within 7 days of receipt of complaint through SCORES, and resolve the complaint within 30 days of receipt of complaint and file the ATR in SCORES within 30 days of receipt of the said complaint/investor grievance, failing which appropriate legal action including initiation of adjudication proceedings against the Noticee and its directors may be initiated by SEBI.

  3. As observed from the contents of the SEBI Circulars, SCORES introduced electronic dealing of the complaints of the investors, by the respective companies. Thus, once a complaint against a company was uploaded in the SCORES marked against the company, it amounted to calling upon by SEBI to such company to redress the investor grievance. Accordingly, it was incumbent upon such company to redress the investor complaint. It was observed that one investor complaint was pending against the Noticee and it was alleged that the Noticee failed to redress pending investor grievance in spite of being called upon by SEBI to do so thereby violated the provisions of Section 15 A(a) and Section 15C of the SEBI Act, 1992.

    APPOINTMENT OF ADJUDICATING OFFICER

  4. The undersigned was appointed as Adjudicating Officer vide order dated 03.03.2016 under section 19 under section 15I of SEBI Act read with rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as 'Rules') to inquire into and adjudge under Section 15 A(a) and 15C of the SEBI Act, the alleged violations of the provisions of Circular No. CIR/OIAE/2/2011 dated June 3, 2011, Circular No. CIR/OIAE/1/2012 dated August 13, 2012 and Circular No. CIR/OIAE/1/2013 dated April 17, 2013 issued by SEBI.

    SHOW CAUSE NOTICE, HEARING & REPLY

  5. Show Cause Notice No. EAD/PJ/VRP/12535/2016 (SCN) in terms of the provisions of Rule 4(1) of the Rules was issued to the Noticee on 29.04.2016, calling upon the Noticee to show cause why an inquiry should not be held against it under Rule 4(3) of the Rules read with Section 15I of the SEBI Act, 1992 for the alleged violations. The said SCN was sent through email in term of Rule 7(b) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 2015 Rules. (hereinafter referred to as 'Rules'). The said SCN was duly delivered at the Email ID- nandi@cifco.in. However, the Noticee failed to submit it reply to the SCN.

  6. In the interest of natural justice and in terms of rule 4(3) of the Rules, the Noticee was granted an opportunity of personal hearing on 08.11.2016, vide notice dated 18.10.2016 at Head Office, Mumbai. The said hearing notice was sent through email in term of Rule 7(b) of the Rules and the same was duly delivered at the Email ID- nandi@cifco.in. Another opportunity of personal hearing was granted on 21.11.2016 vide hearing notice dated 09.11.2016, the said hearing notice was sent through Email and Hand Delivery/Affixture. The hearing notice sent through Email was duly delivered. The notice sent through hand delivery was also duly delivered. However, the Noticee has failed to reply to the SCN till date and further failed to appear before the undersigned for the opportunities of hearing granted on 08.11.2016 and 21.11.2016. In the said SCN and in the hearing notices it was specifically stated that, if the Noticee fails to submit their reply to the SCN or fails to attend the hearing proceeding on the stipulated date and time, it will...

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