The Supreme Court on Wednesday sent the Securities and Exchange Board of India’s (SEBI) case against Vedanta Ltd and three individuals back to the Securities Appellate Tribunal (SAT) for a fresh examination of whether the company’s 2014 share buyback amounted to fraud under securities-market regulations.
A bench of Justices JB Pardiwala and KV Viswanathan partly allowed SEBI’s appeals and directed SAT to complete the fresh adjudication within six months.
The top court also made it clear that SEBI’s earlier release of Vedanta’s Rs 143.125-crore escrow deposit does not bar the regulator from separately examining alleged violations of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations.
The Supreme Court order said, “The fact that the conditions governing the forfeiture or release of an escrow have been satisfied, by itself, cannot be treated as a finding on whether the PFUTP Regulations have been violated or not”.
The court further said, “the mere release of the escrow does not create an automatic statutory bar to proceedings under the PFUTP Regulations because the release of the escrow is not necessarily equivalent to absence of fraud”.