2020 (6) TMI 693 - AT - SEBI

Orders for release of securities - learned senior counsel sought intervention of this Tribunal to stay such orders as well as to allow the appellant to dispose of the securities worth ₹ 21.62 crores and thereafter releasing the remaining securities given by Respondent No. 2 to the appellant - HELD THAT - We pass the following interim directions - The parties shall appear before NSE, either physically or through Video Conference, on June 24, 2020. NSE shall give the contact details and arrangements for the said meeting to the parties at least one day in advance. (b) Based on the database of NSE and other parties rights in respect of the securities in question shall be reconciled/determined within one week thereafter. (c) This Tribunal will hear the matter further on Friday, July 03, 2020. In the interim status quo shall be maintained by the parties i.e. there shall be no transfer of securities as directed in the impugned orders nor the appellant shall alienate any of the securities in question.

Summary

Issues:
Appeal against orders by National Stock Exchange, legality of directions to transfer securities, ownership determination, SEBI order implications, urgent hearing and interim stay request, excess securities held by the appellant, interim directions issued by the tribunal.

Analysis:
The appeal was filed against orders issued by the National Stock Exchange (NSE) regarding the transfer of securities. The Appellant, a Professional Clearing Member (PCM), challenged the legality of the directions to transfer securities without proper ownership determination. The Appellant argued that the directions were arbitrary and lacked a legal basis as they were based on an ex parte SEBI order against another party, not involving the Appellant. Urgent hearing and interim stay requests were made due to the urgency of the matter.

The Appellant claimed ownership of certain securities rightfully transferred to its account and sought permission to dispose of securities worth ?21.62 crores. The Appellant also requested to liquidate shares of a company where ownership was undisputed. The Respondents argued that the Appellant held excess securities, valued at over ?70 crores, which did not belong to them. The tribunal heard arguments from all parties and issued interim directions to reconcile and determine rights over the securities in question within a week.

Due to the Covid-19 pandemic, the hearing was conducted via video conference, and the tribunal digitally signed the order. The parties were directed to act on the digitally signed copy of the order. The tribunal scheduled a further hearing for July 3, 2020, maintaining the status quo regarding the transfer of securities until then. The Misc. Applications seeking urgent hearing and interim stay were disposed of based on the interim directions issued by the tribunal.