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First Global's plea for stay on Sebi order rejected

The Securities Appellate Tribunal on Monday rejected the plea of stockbroker Shankar Sharma and his firms, First Global Stockbroking and others, seeking interim stay of an order passed by Securities and Exchange Board of India, restraining them from undertaking fresh business as stockbroker, merchant banker or portfolio manager pending enquiry.

The presiding officer of the tribunal, C Achuthan, opined that it was not a fit case for his forum to interfere at this juncture. He also directed that the appeal filed by Sharma challenging Sebi's order will be heard on July 19. The tribunal asked Sebi to file its reply by July 9.

Counsel for appellants, Aspi Chinoy, argued that the impugned order of Sebi was based on erroneous assumption that selling of shares by the appellants in a perfectly legitimate and normal manner would constitute market manipulation.

He argued that Sebi's order was vitiated by five factors -- failure to consider relevant data, by relying on incorrect data, by selectively relying on portions of data whilst ignoring other relevant portions, by applying irrelevant and incorrect criterion and analysis and by ignoring relevant criterion.

Sharma's counsel submitted that the impugned order was punitive as it contained no material or basis justifying imposition of such a drastic restraint on the appellants.

Sebi's counsel, Goolam Vahanvati, on the other hand, said the impugned order was only an interim order pending inquiry. These sort of orders were issued by authorities pending probe for specific reasons.

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