Yogesh Mehta, a former share broker, who has slapped scores of cases against the Bombay Stock Exchange (BSE), won a 15-year-old dispute at the Securities Appellate Tribunal (SAT). The tribunal upheld an order by Securities and Exchange Board of India (Sebi), directing the exchange to pay Rs 1.27 million, together with interest, to the broker.
The settlement pertains to a transaction in shares of Amit International in May 1996, later held to be rigged by Sebi. Trading was suspended in the scrip and proceeds were frozen to ensure that manipulators did not receive ill-gotten profits. In 1998, Sebi passed an order asking the exchange to refund the sum due to the clients. In 1999, it said the sum shall be payable to Mehta, the broker, and not the clients.
In 2000-01, BSE executed the regulator’s earlier order in 1998 and paid the clients, overlooking the order passed at a later date (in 1999), which had an over-riding effect.
“We are of the view that BSE was not justified in disbursing the amount to the clients on the basis of the 1998 order when it had already received the 1999 order requiring it to pay the amount to the broker,” the tribunal said in the order. BSE can seek relief at the Supreme Court. Neither Mehta nor BSE officials were available for comment.