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TMI Blog2020 (8) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Insurance Company, a wholly owned subsidiary of EFSL, for carrying on business as a general insurance company in India ( IRDAI Approval ). The said information was disseminated on BSE at 13:40:34 on April 06, 2017. Therefore, the said information cannot be said to have had a role in price spike observed at the time the market opened. In light of this, I am of the view that the acquisition of AIMIN by Ecap was not only a price sensitive information but also was effective in pulling up the price of the scrip of EFSL. From this angle note that the announcement considered to be not UPSI is grossly misconceived. Term sheet has fructified and transformed into a final transaction by way of an SPA. Therefore, hold it not incorrect to take the view that the UPSI had come into existence on the day of signing of Term Sheet itself. In spite of the above, note that the allegation in the present matter is non closure of trading window which admittedly had not been closed, therefore, it seldom matters when the UPSI had actually begun. There was certainly a duty cast upon the Noticee to close the trading window in view of the existence of UPSI which the Noticee had admittedly failed to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred upon me under Section 15-I of the SEBI Act read with Rule 5 of the Adjudication Rules, in exercise of the powers conferred upon me under Section 15-I of the SEBI Act read with Rule 5 of the Adjudication Rules, hereby impose a penalty of ₹ 5,00,000/- (Rupees Five Lakh only) on the Noticee. Said penalty is commensurate with the lapse/omission on the part of the Noticee. Noticee shall remit / pay the said amount of penalty within 45 days of receipt of this order through online payment facility available on the website of SEBI - In the event of failure to pay the said amount of penalty within 45 days of the receipt of this Order, recovery proceedings may be initiated under Section 28A of the SEBI Act for realization of the said amount of penalty along with interest thereon, inter alia , by attachment and sale of movable and immovable properties. - Order/KS/VC/2020-21/8265 - - - Dated:- 16-7-2020 - BEFORE THE ADJUDICATING OFFICER SECURITIES AND EXCHANGE BOARD OF INDIA (ADJUDICATION ORDER No.: Order/KS/VC/2020-21/8265) UNDER SECTION 15-I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE BOARD OF IND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India Act, 1992 (hereinafter referred to as SEBI Act ). APPOINTMENT OF ADJUDICATING OFFICER 4. The undersigned was appointed as the Adjudicating Officer, vide Order dated March 16, 2020 under Section 19 read with Section 15-I(1) of the SEBI Act read with Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as Adjudication Rules ), to inquire into and adjudge under the provisions of section 15HB of the SEBI Act, the alleged failure on the part of the Noticee to comply with the relevant provisions of PIT Regulations, 2015. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING: 5. A Show Cause Notice ref. SEBI/HO/EAD-8/KS/VC/10335/2020 dated April 20, 2020 (hereinafter referred to as SCN ) was issued to the Noticee under the provisions of Rule 4(1) of the Adjudication Rules, to show cause as to why an inquiry should not be held against him and why penalty, if any, should not be imposed on him under the provisions of section 15HB of the SEBI Act for alleged violation of the relevant provisions of PIT Regulations, 2015. 6. The details in respect of alleged violation by the Noticee are as given below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed; Conclusions) Discussion (phone/ meetings/ approvals, etc.) September 16, 2016- October 19, 2016 Evaluating the purchase of electronic platform for business Through various modes including phone, meetings, emails etc. January 25, 2017 Acquiring the shares of AIMIN from its Founders. Term Sheet was signed amongst Ecap Equities Ltd. (a subsidiary of EFSL) and AIMIN. Last week of March, 2017 Finalization of Terms and Conditions of Share Purchase Agreement April 05, 2017 Execution of Share Purchase Agreement Further, as per the letter dated January 29, 2019 of EFSL, the Noticee was one of the persons present in the discussions related to above-mentioned transaction and, therefore, was alleged to be an insider in terms of Regulation 2(1)(g) of PIT Regulations. v. From the chronology of events, as provided in Table 1 above, the announcement dated April 05, 2017 related to the acquisition of AIMIN had come into existen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Regulation 9(1) of PIT Regulations. viii. The above alleged violation of law, if proved, makes the Noticee liable for monetary penalty under the provisions of Section 15HB of the SEBI Act. 7. I note that the Noticee, vide an Email dated May 08, 2020, submitted his reply to the SCN wherein the Noticee, inter-alia , made the following submissions: a. EFSL and the subsidiaries (i.e. the management of these entities) (collectively, Edelweiss Group ), while actively exploring options to upgrade their technology in order to improve service to its customers, identified an electronic platform (software) developed by AIMIN, a fintech company as suited for the Edelweiss Group s business requirements. During the period from September 2016 to October 2016, certain officials of Edelweiss Group commenced preliminary discussions with the promoters of AIMIN in order to assess the software. b. In the course of such evaluation, in December 2016, the Edelweiss Group decided that acquisition of the shares of AIMIN would be a more commercially viable option, and in the best interests of the group, instead of merely purchasing the software ( Proposed Acquisition ). It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of EFSL. To clarify, the gross income and net worth of EFSL, on a consolidated level for the financial years ended 2015, 2016 and 2017, was, respectively, INR 38,938.06 crores, INR 52,680.81 crores and INR 66,188.42 crores, and INR 3,287.1 crores, INR 4,143.83 crores and INR 6,093.06 crores. f. Therefore, as is evident from the facts set out above, there was no finality or certainty in respect of the Proposed Acquisition as the representatives of Ecap and AIMIN had not reached an agreement in relation to the commercial terms, before the signing of the SPA. g. In accordance with Regulation 30 read with Part A(1)(ii) of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ( Listing Regulations ), prompt intimations were made by EFSL to the National Stock Exchange of India Limited ( NSE ) and the BSE Limited ( BSE ) on April 5, 2017, informing them of the SPA to consummate the Proposed Acquisition, as required under Schedule III of the Listing Regulations, without any application of guidelines for materiality. PRELIMINARY OBJECTIONS h. At the outset, the Noticee would like to place on record the following prel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of signing of the Term Sheet is misplaced. It is a settled principle of law that adjudicating the validity of an initial agreement, which was subject to execution of a formal agreement depends on the special circumstances of each particular case and by relying on a media report of this nature, SEBI is ipso facto presuming the existence of price sensitive information. Such presumptions itself assail the fundamental basis of the allegations in Notice and render them vague and unreliable. Therefore, on this ground alone, the Notice stands vitiated and is liable to be set aside. Reliance on the Investigation Report of NSE l. The Noticee would also like to take this opportunity to highlight that only certain extracts of the investigation report by NSE dated January 28, 2020 ( Investigation Report ) have been provided (excluding pages 2 and 14-32). As the Investigation Report is the backbone of the Notice and forms basis for all the factual statements made in the Notice, we request for access to the Investigation Report in toto. This is in line with the Noticee s right to have the opportunity to adequately defend himself and to prevent any prejudice or impairment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of a contract amounted to price sensitive information, observed that where the orders constituted a substantial percentage of the company s turnover and of such enormity and magnitude, then it would be reasonable to presume that it could have a material impact on price. u. Global jurisprudence in this regard also holds a significant persuasive value. Under UK statutes, information is considered insider information if it is likely to have a significant impact on the price of securities, and it is considered to have such an impact if and only if it is information of a kind which a reasonable investor would be likely to use as part of the basis of his investment decisions [ Section 118C of (UK) Financial Services and Markets Act, 2000 ] The US Supreme Court has held that the question of materiality is a mixed question of fact and law, and held that a fact is material if there is a substantial likelihood that a reasonable investor would consider it important in making his/ her investment decision. [ TSC Industries v. Northway Inc. (US Supreme Court, 1976); Basic Inc., v. Levinson (US Supreme Court, 1988) ] Therefore, global standards on materiality of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Listing Regulations (as per the provisions applicable in 2016 and 2017), a material subsidiary was defined as a subsidiary whose income or net worth exceeded 20% of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year. For the financial year ended 2017, total income and net profits of EFSL and Ecap were respectively, INR 66,188.42 crores and INR 6,093.06 crores, and INR 2,155.52 crores and INR 18.49 crores. For the financial year ended 2016, total income and net profits of EFSL and Ecap were respectively, INR 52,680.81 crores and INR 4,143.83 crores, and INR 6,251.24 crores and INR 498. 99 crores. From a bare perusal of this information, it is clear that for neither of the financial years, did the total income or the net profits of Ecap exceed 20% of the consolidated total income or net profits of EFSL. iv. It is critical to note that AIMIN was not being acquired to foray into a new business line or materially alter/expand existing businesses of the Edelweiss Group. It was merely being brought within the fold as a captive service provider to improve operations of the Edelweiss Group itself. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns or place any evidence for an impact on the price of the scrip, it is clear from the above that price movement, if any, during this time period can be attributed to a variety of factors which prevailed during this period and cannot be singularly attributed to the Proposed Acquisition. aa. Therefore, it is submitted that, on the basis of aforementioned details, information in connection with the Proposed Acquisition would not have had a material impact of the share price of EFSL and this is borne out by the share price data as well. bb. A view similar to the above has also been set out in the N. K. Sodhi Committee s Report ( Sodhi Committee Report ). In its report, the committee has indicated that the question whether any information is likely to materially affect the price of shares is a mixed question of law and fact and the report sets out illustrations of price sensitive information (such as mergers, de-mergers, acquisitions etc.). However, it clarifies that every piece of information falling in the category of illustrations need not necessarily be regarded as price sensitive information. The committee has observed that the illustrative examples (such as acquisitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e software (which may not have required any disclosure under the Listing Regulations), Edelweiss Group decided to acquire AIMIN as it was considered to be in best interests of the Edelweiss Group. It is critical to note in this case that the parties reached a final consensus with respect to the Proposed Acquisition only at the time of signing the SPA. Pursuant to the same, the Noticee made a disclosure to the stock exchanges of the Proposed Acquisition on April 5, 2017. ff. It is pertinent to note that the Committee on Fair Market Conduct under the chairmanship of Shri T.K. Viswanathan ( T.K. Viswanathan Committee ), in its report, observed that all material transactions which are required to be disclosed under the Listing Regulations may not necessarily be considered UPSI under PIT Regulations. Based on the recommendations of the T.K. Viswanathan Committee report, SEBI decided to delete Clause (vi) from definition of UPSI under Regulation 2(1)(n) of the PIT Regulations through the Amendment. Any information in relation to the illustrative list under Regulation 2(1)(n) will not become UPSI per se unless the same materially affects the price of securities of the listed company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 2016 to April 2017, during which period the representatives of Edelweiss Group and AIMIN discussed the commercial terms for closing the deal to reach a definitive consensus. mm. Therefore, in the absence of any final decision being arrived in connection with the Proposed Acquisition, it is submitted that no UPSI could be said to have been in existence since January 25, 2017 itself and consequently, there did not exist any obligation on the Noticee to close the trading window from January 25, 2017. nn. In this regard, reference may be made to order of the Hon ble Whole Time Member of SEBI ( WTM ), in the matter of Paired Technologies Limited, where the main question of law was that whether signing of a Non-Disclosure Agreement ( NDA ) amounted to creation of UPSI. The Hon ble WTM observed that though NDAs are binding, they merely facilitate negotiations and due diligence for the transactions, and do not amount to closing of the deal. 17. Non-Disclosure Agreements are for facilitating and conducting Due Diligence exercise ...In order to keep a level playing field, it is absolutely necessary for the party conducting Due Diligence to keep the information so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SEBI), no one else was aware of the Proposed Acquisition, at any time, prior to the execution of SPA and until public announcement on April 5, 2017. tt. Therefore, given that information pertaining to the Proposed Acquisition was restricted to a very limited number of people, any pre-emptive and pre-mature closure of the trading window of EFSL prior to any agreement between Ecap and AIMIN may have also resulted in compromising the strictest standard of confidentiality which were maintained in connection with the Proposed Acquisition. uu. Based on the above, it is humbly submitted that assuming, without admitting, that information in relation to Proposed Acquisition can be considered to be price sensitive, the same could not have come into existence at the signing of the Term Sheet on January 25, 2017. Therefore, there has been no violation of Regulation 9 (1) and Clause 4 of Model Code of the PIT Regulations, and notice should be set aside in entirety. No Other Alleged Contraventions vv. Notwithstanding any of the submissions made above, it is pertinent to note that it is not the SEBI s case that any trades took place during this period. The NSE Investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its technology and identified AIMIN, a small fintech company, in order to serve its customers better. Instead of just acquiring the AIMIN s software (which would not have resulted in disclosure in terms of the Listing Regulations), Ecap decided to acquire AIMIN, which was considered to be in the best interests of the Edelweiss Group from a commercial perspective. This was a business as usual endeavor, as an effort to upgrade quality of operations and service and was not intended to operate as a material change, alteration or growth of existing business lines or introduction of a new business vertical within the Edelweiss group. iii. While this may have been a share purchase in form, the substance of the transaction was to introduce a captive service provider within the group only and not expansion of existing businesses. Therefore, the language in Regulation 2(1)(n) of the PIT Regulations has to be interpreted purposively and in line with ejusdem generis principles of statutory construction, so as to impute price sensitivity to the nature, purpose and potential impact of the transaction and not in a generic manner. iv. The consideration for acquisition of AIMIN was mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, vide his Email dated July 07, 2020 submitted copies of both the documents. 9. Further, in the interest of natural justice, an opportunity of hearing was provided to the Noticee on July 01, 2020 vide letter dated June 22, 2020 which was postponed to July 09, 2020 upon request of the Noticee. It is observed that Mr. Sachin Khandelwal, Mr. Ganesh Umashankar, Ms. Shruti Rajan, Advocate, Mr. Rohan Banerjee, Advocate and Mr. Anurag Gupta, Advocate (hereinafter referred to as ARs ) appeared for the personal hearing along with the Noticee in person. The ARs reiterated the submissions made by the Noticee in his reply dated May 08, 2020. Further, certain queries were raised during the course of personal hearing and the Noticee was advised to reply to the said queries and to make additional submissions on or before July 13, 2020. The Noticee, vide Email dated July 13, 2020 submitted a detailed list of instances wherein he had closed the trading window. Subsequently, vide Email dated July 15, 2020, the Noticee was advised to reply to certain additional queries. Accordingly, the Noticee, vide Email dated July 15, 2020 submitted his reply to the said queries. CONSIDERATION OF ISSUE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On a preliminary note, I find that the Noticee has contended that he was not provided with the complete investigation report. I note from records that the Noticee was supplied with the relevant portion of the investigation report along with the SCN. Thus, I find the argument of the Noticee to be factually incorrect. In this regard, I note that Hon ble SAT, in its order dated February 12, 2020, in the matter of Shruti Vora vs. SEBI had made the following observations: A bare reading of the provisions of the Act and the Rules as referred to above do not provide supply of documents upon which no reliance has been placed by the AO, nor even the principles of natural justice require supply of such documents which has not been relied upon by the AO. We are of the opinion that we cannot compel the AO to deviate from the prescribed procedure and supply of such documents which is not warranted in law. In our view, on a reading of the Act and the Rules we find that there is no duty cast upon the AO to disclose or provide all the documents in his possession especially when such documents are not being relied upon. An inquiry report is totally distinct and different from an investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015, this is to inform you that Ecap Equities Limited (ECap), a wholly owned subsidiary of the Company, has today entered into a Share Purchase Agreement ('Agreement') for purchase of 100% stake in Alternative Investment Market Advisors Private Limited (AIMIN) from its existing shareholders, subject to the terms of the Agreement AIMIN will become a wholly owned subsidiary of Ecap and in turn of the Company. AIMIN is a fintech company for fixed income analytics with innovative trade protocols that aids bond markets with efficient price discovery. FinTech is playing a vital role in transforming the financial industry worldwide as well as in India. Edelweiss is actively looking to adopt innovative FinTech solutions to aid in matters related to illiquidity, accessibility and seek to improve our offering to our customers. This acquisition will help grow Edelweiss's Fixed income advisory business. (emphasis supplied) The proposed acquisition is not with the Promoter / Promoter Group and also does not fall under the related party transactions. 16. It is further alleged that there was no announcement of closure of trading window as available on the websites of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he definition of UPSI, as prescribed in Regulation 2(1)(n) of PIT Regulations, 2015 which reads as below: (n) unpublished price sensitive information means any information, relating to a company or its securities, directly or indirectly, that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following: (i) financial results; (ii) dividends; (iii) change in capital structure; (iv) mergers, de-mergers, acquisitions, delistings, disposals and expansion of business and such other transactions; (v) changes in key managerial personnel (vi) material events in accordance with the listing agreement NOTE : It is intended that information relating to a company or securities, that is not generally available would be unpublished price sensitive information if it is likely to materially affect the price upon coming into the public domain. The types of matters that would ordinarily give rise to unpublished price sensitive information have been listed above to give illustrative guidance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... help grow Edelweiss's Fixed income advisory business . (Emphasis supplied). This clearly suggests that the said acquisition would help Edelweiss to grow its fixed income advisory business; thus having direct impact on the revenue and profit of EFSL. Also, the corporate announcement nowhere indicates the quantum of addition to its revenue owing to the above acquisition; thus not leaving any scope for the market to even gauge the same or to ignore the announcement considering it to be a trivial business acquisition as has been contended by the Noticee. Therefore, I am of the view that the corporate announcement in question, disseminated through the stock exchanges, in the view of any prudent investor, would stand out to be a price sensitive information . 22. I also note from clause (vi) of Regulation 2(1)(n) of PIT Regulations, 2015, defining the term UPSI (reproduced supra) and as was applicable at the time of commission of the alleged violation(s), that any material events in accordance with the listing agreement was considered as UPSI. The said listing agreement was supplanted by SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (hereinafter r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SL had initially planned to acquire certain software but had altered its plans paving way for acquisition of shares of AIMIN itself. I also that the Noticee has argued that the acquisition was an effort to upgrade quality of operations / service. In this regard I note that the Noticee, for certain commercial reasons, had redesigned its plans to the extent of acquiring another business from a simple plan of acquiring a software. Thus, I note that the announcement relates to a transaction of a greater magnitude surpassing the claim as a mere purchase of software. Therefore, I find no merit in the argument of the Noticee in oversimplifying and downplaying a corporate acquisition . 24. Further, I also take note of the price movement of the scrip of EFSL at the relevant point of time. I note that the corporate announcement was made on the platform of BSE at 18:56:48 hours on April 05, 2017 i.e. after the market had closed on the said day. The scrip of EFSL had closed at ₹ 167.90 on the said day. However, I note that the scrip had opened at ₹ 175.95 the next day. This shows that the price of the scrip of EFSL had registered a spike of 4.79% on April 06, 2017. I also note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eet in respect of acquisition of AIMIN by Ecap was signed on January 25, 2017. I have perused the contents of the said Term Sheet which was supplied by the Noticee during the course of the present proceedings. From a perusal of the said Term Sheet, I note that the major terms and conditions including consideration of the transactions were already given in the said Term Sheet. Further, the SPA refers to the escrow agreement dated March 02, 2017 also. While there is some change in the consideration, it has not undergone any major change. Further, the method, time and conditions of payment of consideration had also not undergone any major change. Also, I note from the email of the Noticee dated February 19, 2018, that EFSL had already commenced its due diligence (transaction) during the period from September 2016 to October 2016. I also note from Clause 11 of the term-sheet that it is binding in nature and cannot be terminated by parties in any manner whatsoever. This clearly shows that the intent and plans of acquisition by Ecap had concretised at the time of signing of Term Sheet itself. In view of the above I find the general argument that the Term Sheet, prima facie, is non-bind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Monitor and Report Trading by Insiders under Schedule B read with Regulation 9(1) of PIT Regulations, 2015.Therefore, the Noticee is liable for a penalty under Section 15HB of SEBI Act. The text of the said provision of law is being reproduced below: SEBI Act Penalty for contravention where no separate penalty has been provided. 15HB. Whoever fails to comply with any provision of this Act, the rules or the regulations made or directions issued by the Board thereunder for which no separate penalty has been provided, shall be liable to a penalty which shall not be less than one lakh rupees but which may extend to one crore rupees. 33. In this regard, the provisions of Section 15J of the SEBI Act and Rule 5 of the Adjudication Rules require that while adjudging the quantum of penalty, the adjudicating officer shall have due regard to the following factors namely; - (a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default; (b) the amount of loss caused to an investor or group of investors as a result of the default; (c) the repetitive nature of the default. 34. With regard to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result of the default; no loss has been caused to an investor or group of investors as a result of the default; and there is in fact, no repetitive nature of default, no penalty at all ought to be imposed In view of the contentions of the Noticee regarding technical violation and mitigating factors as prescribed in Section 15J of the SEBI Act, 1992, it became necessary to understand the repetition, if any, of the violation committed by the Noticee. To ascertain the same, the Noticee was advised to furnish information on past closure of trading window since the commencement of PIT Regulations, 2015 when the onus of compliance shifted to the Compliance Officer. 38. In reply to the above, the Noticee, vide email dated July 13, 2020, submitted his reply furnishing the details of closure of trading window as mentioned in the table below: - Table Sr No Year Event Window closure date 1 FY 2015-16 Annual Financial Results Dividend 01-May-15 2 Q1 Financial Results ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Q3 Financial Results 01-Jan-20 1 FY 2020-21 Annual Financial Results 01-Apr-20 39. From the above I observe that the Noticee closes trading window only on occasions of declaration of financial results barring one instance for issuance of securities in September 2017 during the six financial years. However, on perusal of the corporate announcements made by EFSL to the Stock Exchange(s) and disseminated on the websites thereof which information / data is publicly available, I note that there were, apparently, many corporate announcements made by EFSL. The corporate announcements pertain to EFSL itself, or to its subsidiaries or Edelweiss Group. I find such disclosures are warranted in terms of Regulation 30 of LODR Regulations. Further upon perusal of the Code for Prohibition of Insider Trading of EFSL I note that the powers have been vested on the Compliance Officer to decide on the closure of trading window. Since the Noticee has confirmed closure of trading window only for occasion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rued to be a technical violation. 43. I note that the compliance officers are expected to discharge a responsible role in the corporate functioning. The standards of good compliance aid and build up good corporate governance to add value and confidence to the market and its investors. 44. At this juncture, it is noteworthy to quote the observations of the Hon ble Supreme Court of India in the matter of SEBI Vs. Shriram Mutual Fund [2006] 68 SCL 216(SC) that In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regulations is established and hence the intention of the parties committing such violation becomes wholly irrelevant.... . ORDER 45. After taking into consideration the facts and circumstances of the case, material/facts on record, the reply submitted by the Noticee and also the factors mentioned in the preceding paragraphs, I, in exercise of the powers conferred upon me under Section 15-I of the SEBI Act read with Rule 5 of the Adjudication Rules, I, in exercise of the powers conferred upon me under Section 15-I of the SEBI Act read with Rule 5 of the Adjudication Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X
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