SEBI ban order against ADAG brokerage firm withdrawn

MUMBAI: The Securities Appellate Tribunal has let off Reliance Share and Stock Brokers Pvt Ltd, an Anil Ambani group firm, from a four-month suspension for violating fair business practices on payment of Rs 50 lakh as fine.
   
The company had appealed against the market regulator's order dated December 11, 2006, but SAT agreed for disposal of the case on the plea that the applicant offered to pay the fine on the basis of a formula approved by SEBI and a High Powered Advisory Committee.
   
Bombay Stock Exchange said in a circular issued on Wednesday that the SAT, through an order passed on December 7, disposed off an appeal filed by RSSB on terms agreed with the regulator and accordingly the previous SEBI order stands withdrawn.
   
The SEBI had passed an order on December 11 suspending RSSB's certificate of registration as a stock broker for a period of four months, which was scheduled to be effective from January 1, 2007, after it found that RSSB had committed "some serious irregularities in the conduct of its business as a stock broker."
   
However, RSSB had subsequently appealed against the order, which was followed by SAT on December 27, 2006 staying the SEBI order during the pendency of the appeal.
   
In its final order in the matter on December 7, 2007, SAT said that during the pendency of the appeal, RSSB filed an application for a consent order before the SEBI, which was put up before the Advisory Committee.
   
The committee examined the terms of settlement as proposed by RSSB and recommended that the dispute be settled on payment of Rs 50 lakh.
   
"The approval of the committee was considered by two whole time members of SEBI, who have, in principle, agreed to accept the terms recommended by the committee."
   
Subsequently, RSSB filed an application seeking the appeal to be disposed off as per the terms agreed between the parties and approved by the committee and SEBI.
  
After taking into account all the developments, SAT said the appeal has been disposed off and the "order passed by SEBI stands withdrawn."
   
According to the SEBI order passed last year, RSSB violated fair business practices on as many as 13 counts with violations like artificial trade pricing, omission in mentioning relevant entries in contract notes, conversion of trades to client traders, omission in mentioning client ID for execution of trades, consolidation of client orders and unfair trade practices in violation of laws.
  
Reacting to the order, an RSSB official had said at that time that the action was related to alleged procedural defects in the period 1999-2000, when RSSB was part of the combined Reliance group.