2025 (12) TMI 1139 - SCH - SEBI

Self-financed preferential share allotment via circular fund flows held fraudulent; s.15HA joint penalty upheld despite 10-year SCN delay

The dominant issue was whether a joint and several penalty under s. 15HA could be sustained for alleged fraudulent preferential allotment under the PFUTP ... Fraudulent preferential allotment of shares - Validity of levy of joint and several penalty u/s 15HA - no linkage between the appellant and other entities - gross and inordinate delay in the issuance of Show Cause Notice - delay of more than 10 years - Tribunal held that - there is a clear connection in respect of flow of fund - held liable for self-financing of companies own preferential shares and in violation of PFUTP Regulations, and Regulation 77(2) of the Companies Act, 1956 - delay by itself is not sufficient to dismiss entire subject matter - HELD THAT:- We find no grounds made out to interfere with the impugned judgment and order dated 15.10.2025 passed by the Securities Appellate Tribunal - Appeal is, accordingly, dismissed. The Supreme Court dismissed the civil appeal challenging the Securities Appellate Tribunal (SAT), Mumbai's judgment and order dated 15.10.2025 in Appeal No. 669/2022. The Court held that it found 'no grounds made out to interfere with the impugned judgment and order,' thereby affirming the SAT's decision in toto. By declining to interfere, the Court effectively endorsed the reasoning and conclusions reached by the SAT, leaving its findings undisturbed. The appeal was dismissed without modification or remand, reflecting the Court's view that no substantial question of law or other legal infirmity warranted its intervention. All pending applications, including the application for substitution and other related applications, were also dismissed consequentially.