Reconsider order against PACL, SAT tells Sebi
In the high-profile PACL case of illegal fund mobilisation, the Securities Appellate Tribunal (SAT) has set aside Sebi’s order slapping a fine of over Rs 7,000 crore against the company and four directors and has directed the regulator to “reconsider the matter afresh”.
“... the impugned orders are set aside and Sebi is directed to pass fresh order on merits and in accordance with law,” SAT said in an order passed on appeals filed by PACL Ltd and four others challenging the Sebi order dated September 22, 2015. Taking note of submission made by Sebi’s counsel that the regulator “is willing to reconsider the matter afresh”, the Tribunal said “all the contentions of both parties are kept open”.
In its biggest ever fine, Sebi in September last year had imposed a penalty of Rs 7,269.5 crore on PACL Ltd and its four directors for illegal and fraudulent mobilisation of funds from the public, saying the company deserves “maximum penalty” for such large-scale duping of the common man. The penalty followed another order by Sebi in 2014 wherein PACL was asked to refund Rs 49,100 crore it had collected through illicit schemes over 15 years.
Challenging the order before SAT, the counsel for PACL and the four directors argued that “assuming that the appellants had committed fraudulent and unfair trade practices, the penalty under Section 15HA of Sebi Act that could be imposed on the appellants was Rs 25 crore or three times the amount of profits made out of such practices, whichever is higher”.
“It is submitted that in the present case, without computing the profit, if any, the AO has imposed penalty on the appellants which is bad in law,” the SAT order said.