Securities And Exchange Board Of India vs Zenith Steel Pipes And Industries Limited

Tarun Agarwala, Presiding Officer

A Review Application has been filed by Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) for recall of our order dated February 21, 2023 passed in the matter of Zenith Steel Pipes and Industries Limited and other connected appeals.

We have heard Mr. Shyam Mehta, the learned senior counsel with Mr. Abhiraj Arora, Mr. Deepanshu Agarwal, Ms. Misbah Dada, Mr. Shourya Tanay, the learned counsel for the applicant and Ms. Yugandhara Khanwilkar, the learned counsel with Ms. Dharshanadivya Subramanian, Ms. Siddhi K. Bhingarde, the learned counsel for the respondent.

The ground urged is that this Tribunal had recorded in paragraph no. 5 of its order that out of USD 22.99 million, Vintage repaid USD 8.53 million of the loan amount and, thereafter defaulted the balance amount of USD 14.55 million. In paragraph no. 10 of our order it was recorded that the proceeds of the GDR issue was received partly by the company and that too belatedly and same amount was adjusted by Euram Bank against default committed by Vintage. It was, thus, urged that when this Tribunal has recorded that Vintage had committed a default in the repayment of the loan and the Whole Time Member in its order had directed the company to take steps to bring back the balance amount, the Tribunal in paragraph no. 18 of its order has committed an error in giving a finding that the money raised through GDR has been received by the company and has not been misappropriated. It was also urged that in the light of this finding given by this Tribunal the direction of reducing the penalty to Rs. 25 lakh in view of the aforesaid facts was liable to be recalled.

On the face of it, the submission of the applicant appears to be attractive but when we perused the record, we find that even though the WTM directed the company to take steps to bring back the money which was defaulted by Vintage, the AO in its order has specifically accepted and has given a finding that the company has received the goods against the defaulted amount from Vintage.

In view of the aforesaid, we are of the opinion that there is no error in our order and the assertion made in paragraph no. 18 does not require any correction nor reduction of penalty as depicted in paragraph no. 19 of our order requires any reconsideration.

The Review Application consequently fails and is dismissed.

This order will be digitally signed by the Private Secretary on behalf of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Certified copy of this order is also available from the Registry on payment of usual charges.