2019 (6) TMI 1386 - AT - SEBI

Illegal investment transfer raises investor protection issues before SEBI tribunal

Keshav Prasad Misra & Ors.   Versus Securities and Exchange Board of India & Ors.  

The case involves the illegal transfer of investments by Allied Financial Services Private Limited to IL&FS Securities Services Limited for clearing ... Illegal transfer of securities - clearing the trades of other parties - HELD THAT:- While the matter was being heard, we directed the learned counsel appearing for SEBI to seek necessary instructions as to how the appellants are to be protected, if they are found to be genuine investors. When the matter was again taken up after lunch a submission was made by the learned senior counsel that they need further time to seek complete instructions in the matter and requested that the matter may be taken up tomorrow. We adjourn the matter today and the same would be taken up tomorrow i.e. on June 26, 2019 as the first case at 10.30 a.m. We make it clear that the complete instructions be obtained from SEBI, namely, as to how the appellants and other concerned entities would be protected under the SEBI Act if they are found to be genuine investors at the end of the day. Issues:1. Illegal transfer of investments to clear trades by Allied Financial Services Private Limited to IL&FS Securities Services Limited.2. Grievance regarding unattended complaint before SEBI.3. Protection of genuine investors and concerned entities under the SEBI Act.Analysis:1. The appellants raised concerns about the unauthorized transfer of their investments to IL&FS Securities Services Limited by Allied Financial Services Private Limited for clearing trades of other parties. The appellants demanded that these trades be honored by June 27, 2019. A complaint was lodged with SEBI regarding this matter, which has not been addressed to date.2. During the proceedings, the counsel representing SEBI was directed to ascertain how the genuine investors, including the appellants, could be safeguarded in this situation. The need for protection and clarity on the rights of the investors was emphasized during the hearing.3. Following a request from the senior counsel for more time to gather complete instructions on the case, the matter was adjourned to the next day. It was decided that the issue would be taken up as the first case on June 26, 2019, at 10.30 a.m. The tribunal emphasized the importance of obtaining comprehensive instructions from SEBI on ensuring the protection of the appellants and other relevant entities under the SEBI Act if they are indeed genuine investors. The focus was on safeguarding the rights and interests of the investors involved in the case.