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HC upholds petitioner’s arrest by ED citing fraud allegations, need for further investigation, and evidence tampering risk
In the instant case, the petitioner was the promoter of Amtek Group of Companies. Based on IDBI Bank's complaint, the CBI registered an FIR against the petitioner and his company for fraud. The ED registered an ECIR against the petitioner.
The petitioner filed an instant petition challenging the validity of his arrest under Section 19 of the PMLA. It was noted that the assessment of the arresting officer that there was a necessity to arrest could not be faulted as there were substantial reasons encapsulated in grounds of arrest, which prima facie pointed to a large-scale diversion of public money through complex corporate transactions.
The High Court held that since at the stage of the arrest, it was evident that more investigation was required and there was a potential of tampering with evidence and dissuading persons who were associated with the company to give proper disclosures to prevent committing further offences in terms of further diversion of funds and dissipating, obscuring, and obfuscating money trail, the arrest of the petitioner was justified.
Thus, the petitioner's arrest did not violate the provisions of Section 19, and the instant petition was to be dismissed.
Reg 5 of Stockbroker Regulations mandates 15% interest on o/s dues of annual turnover fees; SEBI lacks discretion to deviate: SAT
ICAP IL India (P.) Ltd. v. Securities & Exchange Board of India - [2024] 169 taxmann.com 567 (SAT - Mumbai)
In the instant case, the appellant was a trading member in Wholesale Debt Market (WDM) segment. SEBI in its order, asked the appellant to pay an amount of Rs. 33.51 crore towards outstanding dues of annual turnover fee and further an amount of Rs. 3.78 crore towards an interest.
The appellant preferred to plead with the SEBI for a lowering basis for annual turnover based fee, which was not acceded to by the SEBI. However, the appeal against that order of SEBI was allowed by the SAT.
The Supreme Court set aside the order passed by the SAT and directed the appellant to pay outstanding fee at 0.001% of annual turnover. Further, other ancillary issues, inter-alia, chargeability of interest on outstanding fee, were remanded back to the SAT.
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In pursuance of the aforesaid order, SAT directed that the SEBI was at its liberty to impose simple interest on outstanding dues at rate of 15% per annum. Thereafter, the appellant filed an instant appeal alleging that in holding so, SAT had given discretion to the SEBI on whether to charge any interest or not or to charge interest at a lower rate.
It was noted that Regulation 5 of Schedule-III of Stockbroker’s regulations, 2002, mandatorily provides for charging interest at a rate of 15% on delayed payment. In view of this, SEBI had no discretion in the matter.
The SAT held that the interest liability computed by the SEBI was to be confirmed subject to granting credit to the appellant for interest at the rate of 15% per annum (simple) on the amount lying in the appellant’s credit, if any.
RBI forms a committee to develop the Framework for Responsible and Ethical Enablement of AI in the financial sector
The RBI has set up a Committee on Framework for Responsible and Ethical Enablement of Artificial Intelligence in the financial sector. Dr. Pushpak Bhattacharyya will be the Chairperson of the committee. The committee will assess the current level of adoption of AI in financial services, globally and in India, & review regulatory and supervisory approaches on AI with focus on financial sector globally. Further, the Committee will submit its report within 6 months from the date of its 1st meeting.
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5dThe essence of this update is clear: corporate governance, robust compliance, and ethical use of innovation are essential for trust and growth. In a rapidly evolving business environment, the compass of ethics and governance is the guiding star for enduring success.