BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No. 193 of 2011
Date of Decision : 21.11.2011
India Focus Cardinal Fund
365, Royal Road,
Rose Hill, Mauritius
…Appellant
Versus
Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G-Block,
Bandra-Kurla Complex, Bandra (East),
Mumbai – 400 051.
…Respondent
Mr. P.N. Modi, Advocate with Mr. N.P. Lashkari, Advocate for the Appellant.
Mr. Prateek Seksaria, Advocate with Mr . Mihir Mody and Mr. Mobin Shaikh,
Advocates for the Respondent.
CORAM : Justice N.K. Sodhi, Presiding Officer
P.K. Malhotra, Member
S.S.N. Moorthy, Member
Per : Justice N.K. Sodhi, Presiding Officer (Oral)
This appeal is directed against an ad inte rim ex parte order dated
September 21, 2011 passed by the whole ti me member of th e Securities and
Exchange Board of India (for short the Bo ard) whereby some directions have been
issued, among others, to the appellant rest raining it from dealing in securities or
instruments with Indian secu rities as the underlying in any manner whatsoever until
further orders. The two Depositori es have also been directed to freeze the beneficial
owner accounts of several entities includi ng the appellant. The ex parte order has
been ordered to be treated as a show cause notice. This order has been passed pending
investigations. Since the matter is at the investigation stage, we do not think it
appropriate to examine the merits of the i ssues sought to be rais ed by the appellant.
The learned counsel for the appellant on instructions from his client who is present in
Court states that the memora ndum of appeal be treated as the reply on behalf of the
appellant to the ex parte order cum show cause notice. In the circumstances, we
dispose of the appeal with a direction to th e Board to pass an order after affording an
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opportunity of hearing to the appellant before the end of this year. Having regard to
the nature of the disputes raised in this appeal and taking note of the fact that the
ad interim order is adversely affecting the business of the appellant, we further direct
the Board to conclude the investigations before the end of February, 2012. In the
meanwhile, the appellant is allowed to sell all the securities held by it as enlisted in
Exhibits ‘G’ and ‘J’ to the appeal and th e sale proceeds therefrom shall be deposited
in a fixed deposit with ICICI Bank earning interest. The appellant shall not be
allowed to withdraw monies from that a ccount including interest without the prior
permission of the Board. In case the appell ant wants to utilize any or whole of the
sale proceeds, it shall seek the permission of the Board in this regard which shall be
considered expeditiously. The direction rega rding sale of securi ties has been given
with the consent of the parties in view of the falling market to avoid further erosion in
the value of the portfolio held by the appellant. No costs.
Sd/- Justice N.K. Sodhi
Presiding Officer
Sd/-
P.K. Malhotra
Member
Sd/-
S.S.N. Moorthy
Member 21.11.2011
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