Adjudication Order No. PJ/VP/25/2017. Case: In Re: City Lifts India Limited Vs. Securities and Exchange Board of India
| Case Number | Adjudication Order No. PJ/VP/25/2017 |
| Judges | Prasad Jagadale, Adjudicating Officer |
| Issue | Securities And Exchange Board Of India Act, 1992 - Sections 11(1), 15 A(a), 15-I, 15-J, 15A(a), 15C, 15I, 15J, 19 |
| Judgement Date | January 18, 2017 |
| Court | Securities and Exchange Board of India |
Order:
Prasad Jagadale, Adjudicating Officer
BACKGROUND
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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. City Lifts India Limited (hereinafter referred to as "Noticee") had failed to redress the investor grievance within the prescribed time that is within 30 days.
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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.
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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
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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 SEBI Circulars.
SHOW CAUSE NOTICE, HEARING & REPLY
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Show Cause Notice No. EAD/PJ/VRP/12630/2016 (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- city@citylifts.com. However, the Noticee vide letter dated 17.05.2016 requested 15 days time for the filing the reply to the SCN. The Noticee vide its letter dated 03.06.2016 has submitted its reply to the SCN as under:
This is with reference to the captioned subject wherein you had requested us to show cause as to why an inquiry should not be initiated against us for not resolving an investor complaint and filing an Action Taken Report within the stipulated time.
In this regard we would like to state that we have been incurring losses for the last few years and have made a meager profit of Rs. 84 lacs for the year ended March 31, 2015. As a result of our meager business and troubles we have not been able to retain our staff members and have also not been able to appoint a full time company secretary. It was only due to this reason that we were not able to resolve the complaint referred by you and resolve the same. The Company has appointed Sharex Dynamic (India) Private Limited as the Share Transfer agent of the Company for resolving the complaints of the shareholders as well as providing efficient services to them in a time bound manner. Furthermore, since the securities of the company are suspended for trading, it was not in a position to enter into agreements with depositories for providing demat facilities to shareholders. Hence, presently the physical shares are not converted into demat form. We have however now responded the matter and the details of the Action Taken is as under:
We would like to further submit that there were two other complaints which have been responded as under:
We would like to submit that the company had never intended to delay the matter, but there were circumstances, as discussed above, which resulted in delays. Our Company is now resolving all the issues and we confirm that these delays will not...
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