HC asks Sebi not to proceed against Peerless directors

The Calcutta High Court today directed the Securities and Exchange Board of India (Sebi) not to initiate any proceeding against any directors of Peerless General Finance & Investment Company Ltd.

Peerless moved a writ petition challenging the SEBI's central database of market participants regulations 2003 by which the market regulator ask peerless to obtain an unique identification number for its directors and relatives.

Bhaskar Gupta, Avijit Chatterjee counsel for peerless, argued that the provisions of the 2003 regulation are just unreasonable and liable to be struck down as violative of article 14 of the indian constitution.

It was stated by the Peerless that no market operation of stock market is being carried out by the company. Peerless has nothing to do with the market manipulation as such the regulation does not attract the company.

It was stated that D N Ghosh one of director of Board of the company is also director of Icra Ltd, which come within the perview of SEBI 2003 regulation but as D N Ghosh is common person in both the company, Peerless can not treated as Icra.

There was no similiarity in business of peerless and Icra , the counsel added. Peerless sought court's order declaring the SEBI regulation 2003 to be unconstitutional so far as they define an associate , relatives and related persons and in so far as they impose an obligation on associates and relatives of natural persons as specified in the regulation.

It also asked for declaring that the SEBI regulation 2003 does not apply to unlisted companies whose shares are not traded on the stock exchange including Peerless.

An order of injunction was asked restraining SEBI from taking any penal action against the company and its directors for non obtaining unique identification number under the 2003 regulation.