2022 (2) TMI 1519 - AT - SEBI

Penalty upheld under Companies Act, 1956 as earlier precedents preclude challenge to KMP status in related firms

The SAT (Mumbai) held that the challenge to penal liability based on an appellant allegedly being KMP in two companies is precluded by earlier Tribunal ... Imposition of a penalty - key managerial personnel (‘KMP’) in two companies under the Companies Act, 1956 - contention raised is that the appellant cannot be a KMP in two companies - HELD THAT:- Having heard the learned counsel for the appellants, we find that this issue has been dealt with by us in the Jitendra Kumar Bhatia vs. SEBI [2021 (10) TMI 1481 - THE SECURITIES APPELLATE TRIBUNAL MUMBAI], Shri Tarunkumar Brahmbhatt & Anr. [2021 (4) TMI 1402 - THE SECURITIES APPELLATE TRIBUNAL MUMBAI] and Jinesh Devendra Bhatt [2019 (8) TMI 1940 - THE SECURITIES APPELLATE TRIBUNAL MUMBAI (LB)], wherein the appeals were part of the same investigation. Thus, we are of the opinion that the controversy is squarely covered by the aforesaid decisions of this Tribunal. Appeal fails and is dismissed. The appeal challenges the Adjudicating Officer's order dated November 30, 2018 imposing a penalty of Rs. 20 lacs by SEBI, principally contending that the appellant 'cannot be a KMP in two companies under the Companies Act, 1956,' since the appellant was alleged to be a key managerial personnel ('KMP') of Kartik Share Traders Pvt. Ltd. notwithstanding prior identification as KMP of Bhartiya Global Infomedia Ltd. The Tribunal found the issue already adjudicated in related appeals arising from the same investigation (Appeal Nos. 412 of 2019, 376 of 2018 and 426 of 2018), and held that the controversy is 'squarely covered by the aforesaid decisions of this Tribunal.' Applying those precedents, the appeal fails and is dismissed, with no order as to costs. Procedural note: the matter was heard via video conference and the order will be digitally signed and acted upon accordingly.