Will Not Act On Summons To Subhash Chandra: SEBI To Bombay High Court

The Securities and Exchange Board of India (Sebi) told the Bombay High Court it would not take any further action for three weeks on the summons issued to Essel Group Chairman Subhash Chandra in an alleged fund diversion case.

The HC was hearing a petition filed by Chandra on 5 March challenging the summons alleging the same was issued in a predetermined manner. Chandra's counsel Ravi Kadam sought quashing of the proceedings initiated by Sebi contending that the capital market watchdog was going ahead with the probe in a "predetermined" manner. Sebi's counsel Mustafa Doctor told the court it will not take any action for three weeks. 

Accepting the statement, a bench of Justices Girish Kulkarni and Firdosh Pooniwalla on Wednesday permitted the Sebi to file its affidavit in reply in two weeks. The court has kept the petition for hearing on April 10. 

In January, the stock market regulator had issued multiple summonses to Chandra in an ongoing investigation pertaining to the alleged fund diversion case. Sebi said that Chandra did not respond to the summons.

His plea contended that a fair reading of the summons makes it apparent that Sebi has already predetermined him as guilty at the investigation stage itself, without following due process, principles of natural justice. It further alleges that the ongoing investigation is nothing but a "sham and a formality".

Kadam argued that summons were issued asking Chandra to produce certain documents in an ongoing case. However, under the guise, all kinds of conclusive findings were brought which tantamount to a show cause notice. He urged the court to declare the Sebi’s probe as “illegal and void” as it is vitiated by bias and conflict of interest. 

The plea also seeks that the court restrain Sebi from issuing a final investigative report.