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Tribunal upholds Sebi order

BS Markets Bureau

The Securities Appellate Tribunal has upheld the order by the Securities and Exchange Board of India under Section 11B, directing R K Agrawal to relinquish office as the president of the Uttar Pradesh Stock Exchange. The order was passed by the Sebi chairman on November 3, 2000.

The order also disqualified Agrawal from being a member of the governing board or office bearer of the exchange as well as any capital market-related public institution for a period of two years from the date of the order. Agrawal had appealed against this order.

This case gains significance from the fact that Anand Rathi, former president of the Bombay Stock Exchange was also suspended on the same grounds as Agrawal -- interference in surveillance activities of the exchange.

Agrawal became president of the UPSE on December 18, 1999, and was allegedly involved in irregular activities -- he exceeded his authority by interfering with the margin and surveillance system of the exchange; he failed to initiate action against two members of the exchange who had allegedly become members by submitting fake educational certificates; he disrupted the proceedings of a meeting by walking out and he got the trading terminal of another broker deactivated by interfering in the surveillance activities of the exchange.

Section 11B is an enabling provision enacted to empower Sebi to protect the interest of investors and to promote the development of and to regulate the securities market and to prevent malpractices and manipulations by brokers.

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