{"id":6039,"date":"2019-08-22T19:39:18","date_gmt":"2019-08-22T14:09:18","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=6039"},"modified":"2020-04-18T15:39:51","modified_gmt":"2020-04-18T10:09:51","slug":"procedure-for-holding-inquiry-and-imposing-penalties-by-sebi","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/","title":{"rendered":"Procedure for Holding Inquiry and Imposing Penalties by SEBI"},"content":{"rendered":"\n<p class=\"has-drop-cap\">If at any point, SEBI,  which is also known as the Securities and Exchange Board of India, doubts any of the listed company has committed contraventions or discrepancy or default, the board can opt for holding inquiry and imposing penalties on the respective company. <\/p>\n\n\n\n<p>The SEBI will appoint an adjudicating officer to carry out the process further. In this blog, we have described the procedure for holding an inquiry for the purpose of imposing a penalty. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a4a949857f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a4a949857f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/#When_does_holding_inquiry_and_imposing_penalties_by_SEBI_take_place\" title=\"When does\nholding inquiry and imposing penalties by SEBI take place?\">When does\nholding inquiry and imposing penalties by SEBI take place?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/#Whats_the_procedure_for_holding_inquiry_and_imposing_penalties\" title=\"What\u2019s the\nprocedure for holding inquiry and imposing penalties?\">What\u2019s the\nprocedure for holding inquiry and imposing penalties?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/#Appointment_of_adjudicating_officer_for_holding_an_inquiry\" title=\"Appointment of adjudicating officer for holding an inquiry&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; \">Appointment of adjudicating officer for holding an inquiry&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/#Sending_a_notice_to_the_person_for_the_show_cause\" title=\"Sending a notice\nto the person for the show cause\">Sending a notice\nto the person for the show cause<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/#Notice_for_the_appearance\" title=\"Notice for the appearance\n\">Notice for the appearance\n<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/#Documents_submission_by_the_person_as_proof\" title=\"Documents\nsubmission by the person as proof\">Documents\nsubmission by the person as proof<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/#Order_of_adjudicating_officer_for_imposing_penalties\" title=\"Order of adjudicating officer for imposing penalties\">Order of adjudicating officer for imposing penalties<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/#Submission_of_order_to_SEBI\" title=\"Submission of order to SEBI\">Submission of order to SEBI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-holding-inquiry-and-imposing-penalties-by-sebi\/#Sending_order_to_the_concerned_person\" title=\"Sending order to\nthe concerned person\">Sending order to\nthe concerned person<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_does_holding_inquiry_and_imposing_penalties_by_SEBI_take_place\"><\/span>When does\nholding inquiry and imposing penalties by SEBI take place?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The SEBI orders to hold an inquiry and impose a penalty in case the company or any person is guilty of any discrepancy, fraudulent, committed contravention, etc. as specified under section 15A, 15B, 15C, 15D, 15E, 15F, 15G 2, [15HA and 15HB] of the SEBI Act. <\/p>\n\n\n\n<div class=\"browse\">\n<p>Browse through our articles on services provided at <a href=\"https:\/\/swaritadvisors.com\">Swarit Advisors<\/a>, and just let us know if we can help you with your IPO or Comapny Takeover or SEBI Advisory Services.<\/p>\n<div class=\"browse1\">\n<table class=\"table1\">\n\n<tbody>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/mergers-and-acquisitions\"><span>Mergers and Acquisitions<\/a>&nbsp;<\/span><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/buyback-of-shares\"><span>Buyback of Shares<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/merger-and-amalgamation\"><span>Merger and Amalgamation<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/public-issues\"><span>Public Issues<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/rights-issue\"><span>Rights Issue<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/preferential-allotment\"><span>Preferential Allotment<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/company-takeover\"><span>Company Takeover<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/issue-of-debentures\"><span>Issue of Debentures<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/insurance-broker-license\"><span>Insurance Broker License<\/span><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/table>\n<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Whats_the_procedure_for_holding_inquiry_and_imposing_penalties\"><\/span>What\u2019s the\nprocedure for holding inquiry and imposing penalties?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any entity that has violated securities laws or has provided any wrong information related to the business, the SEBI will hold an inquiry and impose a penalty on it. <\/p>\n\n\n\n<p>The procedure for holding an inquiry and imposing penalties is as follows:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Appointment_of_adjudicating_officer_for_holding_an_inquiry\"><\/span>Appointment of adjudicating officer for holding an inquiry&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If SEBI feels that there\u2019s a ground for\nadjudging under any of the provisions of Chapter VI-A of the SEBI Act, the\nboard will appoint an adjudicating officer with the rank not below than the\nDivision Chief for holding an inquiry for the same. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sending_a_notice_to_the_person_for_the_show_cause\"><\/span>Sending a notice\nto the person for the show cause<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If the person is found to have committed contraventions as prescribed in any of <strong>Sections 15A, 15B, 15C, 15D, 15E, 15F, 15G 2, [15HA and 15HB]<\/strong>, the officer shall issue a notice to the person to show cause within the period as specified in the notice. <\/p>\n\n\n\n<p>Usually, the period is not less than fourteen days from the date of service. The concerned person needs to specify why the inquiry must not be held against him. Furthermore, any notice under sub-rule (1) to any such indicates the nature of the offense that the person has committed. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Notice_for_the_appearance\"><\/span>Notice for the appearance\n<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Next, the officer will consider the cause and has an option for holding an inquiry against the person. For the same, he will issue a notice which includes a date for the appearance of that person. <\/p>\n\n\n\n<p>The person can choose to appear either through his lawyer or personal or other authorized representative. <\/p>\n\n\n\n<p>On the appearance of the person, the officer will explain the offense that the person has committed and that it indicates the provisions of the concerned Act, Rules or Regulations in respect of which contravention took place. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_submission_by_the_person_as_proof\"><\/span>Documents\nsubmission by the person as proof<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Next, the adjudicating officer shall then\noffer an opportunity to the person for producing relevant documents, related to\nthe inquiry, as evidence. If necessary, the officer may adjourn the hearing to\na future date. Furthermore, in accepting such evidence, the officer must not be\nbound to consider the provisions of the Evidence Act, 1872 (11 of 1872):<\/p>\n\n\n\n<ul><li>That the notice\/person\nreferring to in sub-rule (3), (4), and (5) may be waived at the request of the\nconcerned person. <\/li><\/ul>\n\n\n\n<p>Moreover, the Board may appoint an officer namely- presenting an officer in an inquiry under such rule. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Order_of_adjudicating_officer_for_imposing_penalties\"><\/span>Order of adjudicating officer for imposing penalties<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If, after the submission of evidence, the\nadjudicating officer is contented that the person is liable to penalty under\nany of the sections indicated in sub-section (1) of section 15-I, he may, in\nwriting, impose penalties according to the provisions of the pertinent section\/sections\nas given in section 15-I. <\/p>\n\n\n\n<p>At the time of adjudging the quantum of\npenalty, the officer shall have, under section 15-I, due regard to the factors\nas follows:<\/p>\n\n\n\n<ul><li>The amount of unfair advantage\nor disproportionate gain, wherever quantifiable, made as a result of the\ndefault;<\/li><li>The amount that an investor or a\ngroup of investors has lost as a result of the default;<\/li><li>The recurring nature of the\ndefault. <\/li><\/ul>\n\n\n\n<p>All orders under sub-rule (1) shall lay\ndown the provisions of the SEBI Act in respect of which default took place.\nMoreover, it must contain brief reasons justifying such decisions. <\/p>\n\n\n\n<p>Furthermore, the adjudicating officer shall sign and mention the date on every such order. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Submission_of_order_to_SEBI\"><\/span>Submission of order to SEBI<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Next, a copy of the all the orders made\nunder SEBI rules shall be sent by the adjudicating officer to the SEBI. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sending_order_to_the_concerned_person\"><\/span>Sending order to\nthe concerned person<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Furthermore, the officer shall send a\nnotice or order issued under such rules to the concerned person. Moreover, the\nadjudicating officer shall serve the order on the person in the following way,\nthat is to say,-<\/p>\n\n\n\n<ol><li>Through tendering or delivering it to the person or his duly authorized agent;<\/li><li>By sending it to the person through (electronic mail or fax or speed post or courier along with acknowledgment due or) registered post with acknowledgement due to the address of the person\u2019s residential place or his last known residential place or the location where he carries on, or last carried on, personally or business works or last worked, for gain. &nbsp;<\/li><\/ol>\n\n\n\n<div class=\"shadow4\"><p><strong>Note:<\/strong> The notice sent though Fax shall endure a note that the same is via fax. Additionally, in case the document consists of annexure, the officer shall also mention the number of pages being sent.Furthermore, a notice sent through electronic mail must contain the digital signature of the competent authority. Besides, the bouncing of the email shall not constitute a valid service.<\/p><\/div>\n\n\n\n<p><em>&nbsp;<\/em><\/p>\n\n\n\n<p>The rule applicable is referred to as the \u201c<strong><a href=\"https:\/\/www.sebi.gov.in\/sebi_data\/attachdocs\/apr-2017\/1492086713679.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995<\/a><\/strong><a href=\"https:\/\/www.sebi.gov.in\/sebi_data\/attachdocs\/apr-2017\/1492086713679.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">.<\/a>\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"<p>If at any point, SEBI, which is also known as the Securities and Exchange Board of India, doubts any of the listed company has committed contraventions or discrepancy or default, the board can opt for holding inquiry and imposing penalties on the respective company. The SEBI will appoint an adjudicating officer to carry out the [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":6040,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[546],"tags":[547],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6039"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=6039"}],"version-history":[{"count":13,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6039\/revisions"}],"predecessor-version":[{"id":10117,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6039\/revisions\/10117"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/6040"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=6039"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=6039"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=6039"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}