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Appellate Authority rejects J C Parekh's plea against SEBI order

The Appellate Authority in the Ministry of Finance on Friday dismissed former Bombay Stock Exchange president J C Parekh's appeal against the Securities and Exchange Board of India order dated March 24, 1999, which directed him to step down from the post and keep off BSE board meetings.

The SEBI order had also asked not to hold any office with any of the market related institutions for a period of three years.

The AA order comes a day after the Bombay high court granted him a stay against the implementation of the SEBI order.

The AA upheld the SEBI order. ''It is clear that the president, exceeding his powers, directed that the stock exchange be opened beyond normal trading hours. During this time, only certain transactions were entered into. There was a complete lack of transparency in this issue,'' the AA noted in its verdict.

The AA said: ''The directions were not disproportionate and punishment too harsh or excessive. Vital information relating to the broking concern in which vice-president was associated was not given to the board, while other transactions were reported in the meeting of the Board of Governors on June 14.

''Also, earlier while the crisis was developing, the margins were reduced, instead of being increased, in May 1998, with the result that large positions developed in certain scrips. Not only that, the margins were taken in the form of shares of companies in which such large positions had developed instead of shares of some other companies.''

The AA observed that several brokers were attached to one client.

Parekh also directed these operations be done even after June 14. The board's permission had not been obtained for continuing this practice, which is a violation of the norms.

''It is, therefore, clear that the allegations which have been found proved against him are of a serious nature,'' the AA said.

Appellate Authority denies interim relief for Parekh

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