SEBI order of 1st
August 2003 having been upheld at all the forums right up to the Supreme
Court has not yet been implemented. The biggest challenge in front of SEBI is
to get this order implemented and mitigate the sufferings of small shareholders
who are suffering for no fault of theirs. On top of this, the practice of
allowing the defaulters to pay interest only to the original shareholders has
cut the liberties of the poor shareholders to use their own savings for their
personal emergency. The case of the biggest non-promoter shareholder is a great example. he is an highly decorated soldier, now
aged about 75 and sick. He is an spinster and leaves alone at Chandigarh
with no one to take care of him. He had invested huge amount in the then most
happening hotel company in his city –POLO HOTELS LTD. He has been holding
the shares from a date prior to its takeover. Today, he is living on borrowed
money as his investment of crores in Polo Hotels Ltd. is stuck. Because of old
age and no personal support/ assistance he often falls down and at times gets
admitted to the military hospital, not only for treatment but also for
convalescence, since he cannot afford any nurse etc. at home, inspite of crores
of Rupees invested in shares of Polo Hotels Ltd.
He cannot sell
the shares in Polo Hotels Ltd. because of fear of losing out on
substantial amount to be received as interest for the period of delay; simple
interest amount @ 15% ( as per SEBI order dated 01.08.03),for 20 years would be
whopping 300% !!! .
The I have been
requesting SEBI to implement the offer out of funds from IPEF and after
recovery from the acquirers the amount can be replenished. SEBI has, no doubt,
passed some very strong and path breaking orders including the one for
disgorgement of Rs. 11,82,32,526 yet the investors’ misery
has not reduced. All the actions by SEBI till date have failed to provide any
relief to investors who are suffering for more than 2 decades. The offer is
still pending for more than 20 years.
Some of the orders passed against the
promoters of Polo Hotels Ltd. By SEBI, SAT and
Supreme Court
ORDERS PASSED BY SEBI
|
Date |
Regulation
Violated |
Amount |
|
1-Aug-03 |
Make a
fresh Open Offer @ 23.75 with interest @ 15% from 16.11.99. |
|
|
28-Feb-19 |
Insider
trading |
200,000 |
|
28-Feb-19 |
Insider
trading |
800,000 |
|
3-Jun-19 |
Directions
to deposit Rs. 11,94,40,359 for the Open Offer |
11,94,40,359 |
|
17-Jul-19 |
Recovery/
Attachment proceedings No. 4631/2019 Abhey Ram Dahiya |
837,559 |
|
29-Nov-19 |
Violation
of Reg.3(2) & 10(6) of SAST 2011 Penalty for allotment of 88,88,889
shares on 09.12.16 |
11,500,000 |
|
27-Feb-20 |
SEBI
imposed a Penalty of 24 lakhs for non-compliance of its order dated 03.06.19 |
2,400,000 |
|
9-Mar-20 |
Disgorgement
order |
118,232,526 |
|
ORDERS PASSED BY SAT |
|
|
19-Apr-06 |
SAT order uphelding SEBI order ("First
SAT order") |
|
29-Aug-17 |
(SAT Appeal no. 205 of 2017), (“Second SAT
Order”) dismissed with cost Rs.50,000/- |
|
15-Feb-19 |
(Appeal no. 192 of 2018 and Misc. Applications no.
195 of 2018 and 205 of 2018), (“Third SAT Order”) Cost 50,000 |
|
ORDERS PASSED BY SUPREME COURT |
|
|
26-Nov-15 |
SC upheld the SEBI order. (Civil Appeal No.
2727 of 2006) First SC Order |
|
13-Jul-16 |
(“Second Supreme Court Order”) (Review Petition (C)
No. 2361 of 2016), which dismissed the same vide an Order dated July 13, 2016
. |
|
2-Mar-17 |
(“Third Supreme Court Order”) (Curative
Petition (C) No. 66 of 2017), which dismissed the same vide an Order dated March
2, 2017 |
|
5-Apr-19 |
(Civil Appeal no. 2377 of 2019), dismissed (“Fourth
Supreme Court Order”). Subsequent to the aforementioned, the Acquirers
vide a letter dated April 16, 2019, informed SEBI that they had filed a
Review Application before the Hon’ble Supreme Court. |
In the
interest of small shareholders, SEBI should implement the offer on behalf of
the acquirerout of the enormous amount of funds lying in the IPEF,
subsequently the amount can be recovered and the cash balance replenished in
the IPEF.
We sincerely urge you to please use the huge amount available with IPEF
for the purpose it was originally created -- INVESTOR PROTECTION, rather than
allowing it to become just an another source of funds collection for the
GOI. Your providing such relief will make the creation and existence of
SEBI more meaningful and truthful ;every investor will agree that SEBI is
really “ HER INVESTOR
KI TAQAT”
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