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Dish TV files for settlement with SEBI while independent directors will fight it out

Dish TV has decided to bury the hatchet with market regulator SEBI over the matter involving disclosure of the company’s annual general meeting (AGM) results.

The company has filed an application for an amicable settlement of the matter under SEBI’s consent terms, sources told BusinessLine. This comes even as Dish TV’s independent directors (IDs) have decided to defend their position and take the fight to SEBI via the adjudication proceedings.

Ex-parte order
On March 7, SEBI whole-time member S K Mohanty had passed an ex-parte interim order against Dish TV, its key management employees and three IDs including BD Narang, Rashmi Aggarwal, and Shankar Aggarwal. An ex-parte injunction is mainly a direction/command to restrain, granted after hearing only one party in matters of ‘urgency’, without a notice to the other parties involved.

A full hearing is held at a later date. SEBI order imposed strictures on all of them including freezing of their demat accounts on the reasoning that they had failed to adhere to two advisories by SEBI that directed them to declare the results of the AGM held on December 30, 2021. SEBI passed strictures for Dish TV’s failure to divulge the results of the AGM held two months ago.

Before filing for settlement, the law firm engaged by Dish TV had sent a strong worded reply to SEBI, which said that no point of ‘urgency’ was mentioned by SEBI in its order to validate an ex-parte order. The reply also said stated that SEBI Act does not empower the regulator to initiate proceedings or levy penalty for the violation of advisories it had issued.

“No urgency has been spelt out in passing such ex-parte order. Therefore, the respondents, who are directly adversely affected by the SEBI order, should have been treated reasonably by giving an opportunity of being heard before such finding and directions are issued against the respondents in the peculiar facts and circumstances of the case. Such an unjust action is liable to be struck down simply on the ground of unfairness and not due to any innuendo of malice or bad faith,” said the reply.

IDs hit back at SEBI
On March 24, BusinessLine had reported that the IDs had hit back at SEBI for passing such strictures against them without following the principles of natural justice and giving them a hearing. A reply by IDs to SEBI said the regulator’s order against them was not tenable since the SEBI advisory was never presented in the board nor the regulator made any attempt to reach out to them. In the past, the Securities and Appellant Tribunal (SAT) has said that SEBI can issue ex-parte orders only in case of emergency and the powers should be used by the regulator sparingly.

Also, Dish TV and the IDs had told SEBI that the regulator had gone against the spirit of its own circular, which said that a 10-daynotice should be given by SEBI before freezing the demat accounts of any company promoters. In this case, SEBI froze the demat accounts of Dish TV independent directors without even giving them any hearing or a notice of even a single day. The Hindu BusinessLine

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