The Securities and Exchange Board of India (Sebi) has suffered another setback with Securities and Appellate Tribunal (SAT) picking up holes on its interim order dated April 27 on the benami multiple demat accounts. SAT stayed an order of Sebi asking National Securities Depository Ltd (NSDL) to revamp its management.‘‘We are prima-facie of the view that the respondent board (Securities and Exchange Board of India) has no power to issue directions to the promoters of a company to revamp the management,’’ an interim order issued by presiding officer of SAT Justice N. K. Sodhi said.‘‘Your (Sebi)’s job is to regulate the market and not to interfere in the internal functioning of a company,’’ he said. Sodhi asked the Sebi lawyer which section of the Sebi Act gives powers to the regulators to issue such kind of direction. The regulator had asked NSDL to submit a report after the inspection of the records for committing errors in the benami demat account case and directed the promoters of the company to revamp its management.‘‘The direction issued in para 17.14 of the impugned order directing the promoters of the appellant to revamp the management therefore will remain stayed during the pendancy of the appeal,’’ said the SAT order.‘‘We have nothing to say,’’ said an NSDL official.In the interim order, SAT further observed, ‘‘we have perused the impugned order and it is clear that the findings recorded are only prima-facie. We have no doubt that while passing the final order, the board will not be influenced by these findings and that the said order will be based on the material collected by it during the course of investigations including the one which is already in its possession.’’‘‘One of the primary grievances made by the appellant is that even though the impugned order is interim in nature pending final investigation yet the board has recorded firm finding on the issues involved therein which will prejudice their cause,’’ the SAT order observed.
