Court directed SEBI to provide required documents to minority shareholders of BNL

Ashok Dayabhai Shah And Ors Vs Securities And Exchange Board of India And Ors (Bombay High Court)

Bombay High Court held that minority shareholders of Bharat Nidhi Ltd. (BNL) are entitled to get documents related to proceedings by SEBI against BNL. Accordingly, directed to provide the same in terms of Court’s order dated 23 October 2023.

Facts- The petitioners in these two writ petitions are minority shareholders of respondent no.2-Bharat Nidhi Ltd. (BNL). They had made various complaints to respondent no.1-SEBI of violation by BNL of various provisions of securities laws, including violations pertaining to the Minimum Public Sharing Norms as also serious violations in respect of the promoter’s disclosure in the BNL’s shareholdings. The petitioners contend that the complaints as made by the petitioners were subject matter of investigation by the SEBI. It is the petitioners case that neither the investigation report nor any other relevant documents in such regard were supplied to the petitioners, despite the fact that the petitioners were shareholders of the BNL.

It is the petitioners’ case that on such investigation, SEBI issued a show cause notice to respondent no.2-BNL. However, copy of the same was not furnished to the petitioners. It is their case that the SEBI at the behest of respondent nos.2 to 9 there is a farce of proceedings against respondent Nos.2 to 9. The approach of the SEBI is as if such proceedings are required to be held ‘in camera’ and that all materials / documents pertaining to such proceedings as initiated by SEBI against respondent nos. 2 to 9 are privileged documents. The petitioners contend that such approach can never be adopted by a public body like SEBI.

Today the proceedings are before us on the backdrop of our detailed order dated 23 October 2023 by which we had directed the SEBI to provide documents to the petitioners as prayed for in prayer clause (g) of the petition.

Please become a Premium member. If you are already a Premium member, login here to access the full content.