Alok Industries Limited Vs Securities and Exchange Board of India (Securities Appellate Tribunal, Mumbai)
Summary: The Securities Appellate Tribunal, Mumbai allowed the appeal filed by Alok Industries Limited and quashed the Adjudicating Officer’s order dated July 30, 2020 imposing a penalty of Rs. 12 lakhs for violation of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The proceedings arose after the State Bank of India initiated proceedings under the Insolvency and Bankruptcy Code. An Interim Resolution Professional was appointed on July 18, 2017, a Resolution Plan was accepted on June 20, 2018 and the National Company Law Tribunal approved the Resolution Plan on March 08, 2019. Six months thereafter, the SEBI Adjudicating Officer issued a show cause notice dated October 18, 2019 alleging violation of the LODR Regulations by the company. SAT held that the controversy was squarely covered by its earlier decision in Monnet Ispat & Energy Limited vs. SEBI, Appeal No. 238 of 2020, decided on 29.10.2020.
In that case, SAT had considered the effect of an approved resolution plan upon subsequent SEBI proceedings concerning liabilities and violations pertaining to the period before the resolution. Following that decision, SAT held that the penalty order against Alok Industries could not be sustained. The impugned order dated July 30, 2020 was consequently quashed and the appeal was allowed with no order as to costs. The Tribunal also recorded that the matter had been heard through video conference due to the Covid-19 pandemic and directed the parties to act upon the digitally signed copy of the order.
