The case has been settled after State Bank of India (SBI) agreed to pay Rs 6.8 lakh towards 'settlement charges', Sebi said today while disposing of the ongoing adjudication proceedings against the bank in this matter.
SBI was found to have acted as both lender and debenture trustee to certain companies.
However, Sebi said it can reopen the case or commence fresh enforcement actions against the bank if any representations made before it during the settlement proceedings are subsequently discovered to be untrue.
The case relates to a Sebi inspection of the Debenture Trustee (DT) operations of State Bank of India during July 26, 2010 to July 30, 2010.
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During the inspection, a few public issues and listed private issues wherein the applicant had acted as DT were examined.
"It was, inter alia, observed that the applicant had acted as both lender and DT to certain companies. The standard trust deed which the applicant had accepted from the issuer companies contained certain clauses which were not in conformity with the provisions of the model trust deed... And certain clauses which were required to be included were not part of the standard trust deed.
In view of this, Sebi had initiated adjudication proceedings against the bank in May 2012 and a Show Cause Notice was later issued to SBI in November that year.
The bank later filed an application in March 2013 with Sebi to settle the matter and later revised its settlement plea in August 2014 by offering to pay Rs 6.8 lakh as 'settlement charges'.
Sebi's High Powered Advisory Committee in a meeting on October last year considered the settlement terms proposed by SBI and recommended the case for settlement upon payment of Rs 6.8 lakh.