Madhabi Puri Buch, the chief of the Securities and Exchange Board of India (Sebi), conveyed sincere regret on Friday for the lapse in unfreezing shares held by Kirloskar family members in Kirloskar Industries Ltd (KIL), despite the directive from the Securities Appellate Tribunal (SAT).
Addressing reporters at the CII Global Economic Policy Forum, Buch stated, “The delay in unfreezing accounts was unacceptable. Regardless of the reasons, including issues with communication with the depository, Sebi takes full responsibility and deeply regrets the incident.”
She further disclosed that Sebi had initiated a comprehensive review process, which is expected to be completed within 30-45 days. “We are committed to revamping the process to ensure that the risk of such incidents happening again is minimized,” she added.
The remarks followed the rebuke from SAT earlier in the week, where Sebi was criticized for failing to comply with the tribunal’s order to release the Kirloskar family’s shares in Kirloskar Industries. SAT directed Sebi to deposit costs of Rs 5 lakh with the tribunal’s Registry, citing a “lackadaisical approach” to the case.
Sebi had imposed a six-month market access prohibition on Atul Kirloskar, Rahul Kirloskar, Alpana Kirloskar, Arti Kirloskar, and Jyotsna Kulkarni in October 2020. The appellate tribunal, in an interim order in December 2020, stayed Sebi’s decision, allowing the appellants to access their demat accounts with the condition not to sell their KIL shares.
Despite the final order in October of the following year, setting aside Sebi’s initial decision, the shares in KIL remained frozen for the appellants, according to SAT. The tribunal highlighted a blame game between Sebi and NSDL, stating, “Both entities are blaming each other for non-compliance of the SAT order. The net result is that there is apathy on the part of Sebi in not taking follow-up action.”
