Securities Appellate Tribunal Upholds SEBI Order Against Gautam Thapar And Other Former Officials Of CG Power
[ By Bobby Anthony ]The Securities Appellate Tribunal (SAT) has upheld the Securities & Exchange Board of India’s (SEBI) order which barred CG Power’s former chairman Gautam Thapar as well as three other former officials of the same company from accessing capital markets.Action has been taken against them for misstatement of accounts as well as funds diversion.The order was passed in...
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The Securities Appellate Tribunal (SAT) has upheld the Securities & Exchange Board of India’s (SEBI) order which barred CG Power’s former chairman Gautam Thapar as well as three other former officials of the same company from accessing capital markets.
Action has been taken against them for misstatement of accounts as well as funds diversion.
The order was passed in response to an an appeal filed by CG Power officials namely Gautam Thapar, V R Venkatesh, Madhav Acharya, B Hariharan and Avantha Holdings Ltd, against an “ex-parte ad interim order” passed by SEBI on September 17, 2019.
Earlier, the SEBI had directed the Bombay Stock Exchange (BSE) to appoint an independent auditor to forensically audit the books of accounts of CG Power from 2015-16 onwards to verify wrongful diversion of company's funds, misrepresentation of financials and manipulation of accounts.
CG Power’s former officials argued before SAT that by passing the ex-parte ad-interim order, the SEBI has already placed the appellant guilty without trial.
They had also contended that an ex-parte ad-interim order can only be passed in “extremely urgent cases” and that if an opportunity of hearing was given, they would have proved that all alleged transactions were duly authorized and approved by the risk audit committee as well as the board of directors.
The officials had argued that in order to file an appropriate reply to the ex-parte ad-interim order cum show cause notice, appellants have to rely upon certain documents which are in the custody of the company, which have been denied to them (appellants).
However, upholding SEBI’s order, SAT stated that there is ample evidence to show urgency and, considering the material brought on record, the matter being serious, warranted an inference by SEBI.
The SAT also noted that the contention of the appellants that no case was made out for grant of an ad-interim ex-parte order is misconceived and cannot be accepted.
The SAT has asked the appellants to file a reply before the SEBI.
