The Securities Appellate Tribunal on Tuesday upheld Sebi's order against Rich Universe Network and its chairman and managing director in a case related to the company's failure to respond to the market regulator's summons.
The Securities and Exchange Board of India (Sebi) had imposed a penalty of Rs 25 lakh on Rich Universe and Rs 15 lakh on its CMD Shashwat Agarwal for not furnishing details sought by the market regulator related to alleged irregularity in the shares trading of the company.
With the purpose to analyse the alleged violations committed by the entities, Sebi had issued a summons to Rich Universe firm and its CMD asking them to provide certain information documents, which they failed to furnish.
Rich Universe had approached SAT challenging Sebi's order.
In its order today, the tribunal said that "keeping in view the adamancy of the appellants (Rich Universe and its CMD) in observing total indifference towards the summons issued by the respondent (Sebi), we hold that the present appeal is bereft of any merit and the same is hereby dismissed with no order as to costs".
It observed that failure on the part of entities to furnish information "is not only contemptuous but also a hindrance in the way of conducting smooth investigation and enquiry by the regulator to arrive at a just and fair conclusion as per the provisions of Sebi Act, 1992".
The matter relates to Sebi probe into the irregularities in the share trading of Rich Universe Network (earlier known as Rich Capital & Financial Services) from February 1 to September 24, 2010.
Sebi had noticed that a group of entities was indulging in circular trading thereby creating artificial volume in the scrip of the firm that also influenced its share price.