ORDER
Kumar Rajaratnam, J. (Presiding Officer)
1. Admit.
The appeal is taken up with consent of parties for final disposal.
2. The appellant, being aggrieved by the order of the respondent dated 17th of May, 2005 by which the respondent has imposed a penalty of Rs. 2,00,000 on the appellant, has preferred this appeal.
3. The allegation against the appellant was that the appellant failed to furnish information to the respondent with regard to alleged price manipulation of shares of Monalisa Infotech Ltd. There is no discussion in the impugned order with regard to the period of investigation but the entire order proceeds on the fact that the appellant did not co-operate with the respondent. The only reference to the allegation, for which information was required, is set out in paragraph 9 of the impugned order, which reads as under:
I noticed that sufficient opportunity was given to the noticee by the investigating authority but every time the noticee failed to appear before the investigating authority. I also noted that there is an allegation that the noticee executed various circular transactions at ASE and BSE and created artificial volume in the scrip of Monalisa Infotech Ltd., for which action under Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995, read with Sections 11 and 11B of the SEBI Act, 1992 including direction to prohibit from dealing in securities for a particular duration was initiated against the noticee. It is also observed that the information sought by the investigating authority was very crucial information for the investigation of the price manipulation in the scrip of Monalisa Infotech Ltd. By his repeated failure to adhere to the summonses, the noticee hampered the process of investigation. In view of the above, I find that non-compliance with the summons issued by the investigating authority of SEBI by the noticee is established.
3A. It is common ground that in spite of number of opportunities, the appellant did not appear before the respondent and furnish information. The appellant has submitted that he will fully co-operate and pass on whatever information he has with respect to the manipulation of the scrip Monalisa Infotech Ltd.
4. However, the learned counsel for the appellant vehemently argued that the matter should be remanded since the order is an ex. parte order.
5. We see considerable force in the submission of the learned counsel for the appellant but no useful purpose will be served in this exercise since the appellant has agreed to fully co-operate with the respondent in passing on whatever information the respondent seeks.
6. The Adjudicating Officer was conscious of Section 15J while imposing the penalty. Section 15J reads as follows :
15J. Factors to be taken into account by the Adjudicating Officer.–While adjudging the quantum of penalty under Section 15-I, the Adjudicating Officer shall have due regard to the following factors, namely:
(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the default;
(c) the repetitive nature of the default.
7. An affidavit dated 22nd November, 2005 stating that the appellant has filed all the documents required by the Investigating Officer, including details of purchase and sale of the shares of M/s. Monalisa Infotech Ltd. and copies of bank statements of the appellant to the Adjudicating Officer, the respondent in the appeal, in the office of SEBI. It is placed on record.
8. Taking an overall view of the picture and since the appellant has undertaken before us to fully co-operate with the respondent, if sent for, it would be appropriate to impose a penalty of Rs. 50,000. The order of the respondent is, accordingly, modified.
9. The appellant shall deposit the amount of Rs. 50,000 as penalty within eight weeks from the date of receipt of this order.
10. The appeal is disposed of accordingly.
11. No order as to costs.