SAT sets aside Sebi order against Earnest Healthcare

Sebi had imposed a penalty of Rs 10 lakh on the company for allegedly failing to redress investors' grievances and submit a status report

The Securities Appellate Tribunal (SAT) has set aside a Sebi order that slapped a fine of Rs 10 lakh on Earnest Healthcare for alleged failure to redress investors' grievances and submit a status report as specified by the market regulator.

 

In an order dated October 9, the tribunal directed Earnest Healthcare to effectively deal with all pending complaints of investors and also inform them about the status of their complaints. The same should also be intimated to Sebi.

 

According to the tribunal, all these have to done within three months and has also requested the Sebi to review its investors grievances system.

 

The Securities and Exchange Board of India (Sebi), in November 2012, had imposed a penalty of Rs 10 lakh on Earnest Healthcare for allegedly failing to redress investors' grievances and submit a status report as specified by it.

 

The matter relates to way back in 2003, when Sebi through an order had prohibited the company from accessing capital markets for a period of five years for non redressal of investors' complaints.

 

The debarment was completed in 2008. The regulator in April 2011 had directed the firm to resolve 51 investor grievances pending against it within 15 days from the date of receipt of the letter and submit a status report.

 

However, the company failed to redress the investor complaints within the specified time as well as submit the Action Taken Report (ATR) in the proforma prescribed by Sebi.

 

"...It is ordered that order of Sebi imposing monetary penalty of Rs 10 lakh on appellant (Earnest Healthcare) is set aside and the appeal is allowed," SAT said in an order issued yesterday.

 

SAT directed Earnest Healthcare "to deal effectively with all pending grievances of investors, with due application of mind, and inform all investors, whose complaints are available and who send their complaints now, of the status of complaints and what has been done...In three months from date of this order with intimation to Sebi."

 

Besides, the Tribunal requested Sebi "to review its investors grievances system, including ATR and communicational requirements and come out with a new system or modify the existing system, which is cost effective, saves unnecessary labour and also addresses investor's grievances effectively in a meaningful manner, within fixed time framework."