Sebi Order Penalizing Axis Bank Rs.200, 000 Upheld by the Securities Appellate Tribunal (SAT)

Sebi Order Penalizing Axis Bank Rs.200, 000 Upheld by the Securities Appellate Tribunal (SAT)

Securities and Exchange Board of India (Sebi) has penalized Axis Bank and ordered the bank to pay Rs 2, 00,000 for failing as a debenture trustee.

The regulator probed the books since 1995. After investigation SEBI had penalized the Axis Bank.
SEBI found several deficiencies in the bank’s functioning as a debenture trustee.



The SEBI order said that The noticee (Axis Bank) has lent to the company (HCC) a loan agreement dated September 29, 2008. The noticee also lent loan to Jindal Stainless before
its Rs 200-crore issue opened in May 2004. The same are not in compliance with the provisions 13A (b) of the regulations, as the notice cannot act as a trustee to the company it has lent monies,”

In investigation SEBI found that Shardul Shroff was a common director on the boards of both Axis Bank and Noida Toll Bridge at the time, when the bank agreed to act as a
debenture trustee.

In another case SEBI found that Rama Bijapurkar was a director on the board of Axis
bank and Mahindra & Mahindra Financial Services at the time of accepting the
offer as trustee.

After that Appeal was filed and now The Securities Appellate Tribunal (SAT) has upheld the order passed by the Securities and Exchange Board of India (Sebi) against Axis Bank.

SAT observed that debenture trustees cannot have the same set of individuals on its board and that of the issuer company. Further, debenture trustee cannot lend money to an issuer company.

Reality views by sm –
Tuesday, September 27, 2011

Tags- News Finance SAT SEBI Axis Bank Fine Penalty 200000

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SAT upholds Sebi order against Axis Bank

http://www.business-standard.com/india/news/sat-upholds-sebi-order-against-axis-bank/450540/