Earlier on March 9, the SAT had sustained SEBI’s regulatory measures against SICCL, turning down appeals from both the company and its board members regarding the controversial issuance of optionally fully convertible debentures (OFCDs).
The three-member tribunal had ruled that the OFCDs rolled out by SICCL from 1998 to 2008 actually amounted to a public offering, which places the matter directly under SEBI’s oversight.
According to the tribunal, SICCL collected approximately Rs 14,106 crore from nearly 1.98 crore investors through these debentures over the decade-long timeframe. The panel concluded that gathering such funds on such a massive scale from a huge number of investors could not legally be classified as a private placement, contradicting the firm’s assertions.
Though the tribunal dismissed the appeals filed by SICCL and its directors, it ruled in favour of a separate appeal brought by the four managers and the company secretary, deciding that ordinary employees should not be penalized for corporate actions.
It also noted that the prospectus had been signed by the company secretary pursuant to powers of attorney granted by the directors, who remained responsible as principals for the acts of their agent.
The SEBI has now challenged that part of the ruling before the apex court.
