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HC dismisses Rathi's petition challenging Sebi ban

In a landmark judgement, the Bombay high court on Wednesday dismissed the petition filed by former Bombay Stock Exchange president Anand Rathi, challenging the suspension of his four firms from trading on the BSE by the Securities and Exchange Board of India.

The division bench comprising Justice A P Shah and S H Vajifdar, in its order, observed that Sebi has the power under Section 11B of the Sebi Act to pass such an emergent order.

Sebi counsel Goolam Vahanvatti told the division bench that inquiry into the matter is pending and it will be expedited and completed within three months.

In view of this statement, the court observed that the ban on Rathi and his firms would continue till the inquiry is complete.

This is the first time in the history of any high court in India that a Sebi order was challenged in such an emergent situation.

Sebi had stopped Rathi from trading on March 12 for his alleged involvement in seeking price-sensitive details from the surveillance department of the BSE, which were recorded on tape.

It is alleged that the information was in turn passed on to others who in turn gained by trading on this information. However, Rathi refuted the allegations and challenged the suspension order by Sebi in court.

UNI

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