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SAT sets aside Sebi order on Videocon, BPL

Securities Appellate Tribunal has set aside the orders of the Securities and Exchange Board of India banning Videocon and BPL from accessing capital markets for manipulating their scrips in 1998.

The Sebi orders under Section 11 and 11B of Sebi Act against the two companies, banning Videocon for three years and BPL for four years, were not in the interests of investors and have no legal backing and hence cannot be sustained, SAT said in its ruling in Mumbai on Thursday.

In the absence of sufficient material evidence to establish that the two companies had directly or indirectly indulged in market manipulation, the market regulator's orders holding them guilty cannot sustain and therefore deserve to be set aside, SAT ruled.

Section 11 and 11B of the Sebi Act are mainly focused on investor protection and the latter does not even remotely empower the market regulator to impose penalties, SAT observed.

SAT in October last year had similarly set aside Sebi's order against Sterlite Industries Ltd which was banned from accessing capital market for two years for manipulating its scrips during the same time.

On an appeal by these two companies against prosecution proceedings launched by Sebi on them, SAT said it does not have jurisdiction to set aside the prosecution pending before the court.

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