155 of 2011, by which the appeal filed by M s Informetics Valuation and Rating Pvt.
The respondent stated that M s. Coment Mauritius Limited has invested in the appellant companypany through its associate companypany M s. ACE Step Management Ltd., which was holding 3,65,000 Three Lac Sixty Five Thousand 10.84 equity shares in their companypany, which is within the parameters of Regulation 4 e of the CRA Regulations, 1999.
In fact, the appellant by letter dated 28th July, 2010 once again advised the respondent to furnish Audited Annual Accounts of its promoters M s. Coment Mauritius Limited for the period 2006 to 2009.
Thereafter, the respondent by its letters dated 15th March, 2011 and 18th March, 2011 submitted the Audited Annual Accounts of M s. Coment Mauritius Limited for the periods ending 31st December, 2003 to 31st December, 2007.
100 crores as per the Annual Accounts for the previous five years.
On its request, the respondent was also granted a personal hearing by the Whole Time Member of SEBI on 10th June, 2011.
Being aggrieved by the impugned order of SAT, SEBI is in appeal before this Court under Section 15Z of the SEBI Act.
The SAT by its judgment and final order dated 9th November, 2011 allowed the appeal and set aside the impugned order dated 24th June, 2011 and 21st July, 2011 and remitted the matter to the appellant to companysider the application of the appellant without requiring it to produce the accounts for the two years ending December, 2010.
The respondent companypany was incorporated on 23rd June, 1986.
On 11th June, 2009, the respondent submitted an application to SEBI under Regulation 3 of the Securities and Exchange Board of India Credit Rating Agencies Regulations, 1999 the CRA Regulations, 1999 seeking registration as a CRA.
155 of 2011 on 30th August, 2011 before the SAT.
By the impugned order, the SAT has remanded the matter back to the appellant to companysider the application of the respondent seeking registration as a Credit Rating Agency CRA without requiring the respondent to produce Audited Annual Accounts of the respondents promoters for the two years ending December, 2010.
Again on 24th June, 2011, the Whole Time Member of the appellant directed the respondent to indicate as to which entity is its promoter s along with the basis of companysidering the entity as such and to submit Audited Annual Accounts of the promoter s for the last five years along with companyputation of net worth as per the SEBI prescribed formula latest by 15th July, 2011, failing which the application of the respondent would be deemed to be rejected.
By letter dated 20th August, 2009, the appellant required the respondent to furnish companyplete details of his promoters, companyfirm the status of their eligibility under Regulation 4 e of the CRA Regulations, 1999, offer companyments on a discrepancy numbered in the promoters net worth certificate etc.
Their accounts are audited and they have provided the appellant with a certificate of their bankers ING Asia Private Bank Ltd., Dubai, to that effect.
We have heard the learned companynsel for the parties at length.
Whilst allowing the appeal, the SAT interpreted Regulation 4 e , Regulation 7 and Form A companytained in the First Schedule of the Regulations.
Ltd., the respondent herein was allowed, and the order dated 24th June, 2011 passed by the Whole Time Member of SEBI and companymunication dated 21st July, 2011 of the Securities and Exchange Board of India the SEBI was set aside.
Infomerics India Foundation Consortium Member as Policy Making Board.
Further undertakings and companyfirmations as required by the appellant were also provided.
However, even during the personal hearing, the respondent was advised to file the Audited Accounts of M s. Coment Mauritius Limited for the years 2009 and 2010.
The promoters of the respondent are stated to be M s. Coment Mauritius Limited through M s. ACE Step Management Ltd. M s. V. Malik Associates, Chartered Accountants Consortium Member for all the Accounting and Management backup.
All information that was required by the appellant was supplied by the respondent.
The appellant SEBI is a Statutory Board established under the SEBI Act to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market and for matters companynected therewith or incidental thereto.
The respondent through its letter dated 21st August, 2009 submitted the reply to the aforesaid discrepancy pointed out by the appellant.
Ultimately, on 21st July, 2011, the appellant rejected the application of the respondent.
The respondent on 5th July, 2011 sought review reconsideration of the aforesaid order.
The respondent also companyfirmed that M s. Coment Mauritius Limited is a promoter of the respondent companypany having a companytinuing net worth of minimum Rs.100 crores as per its Audited Annual Accounts for the previous five years prior to the filing of the application with the Board.
Aggrieved by the rejection, the respondent preferred an appeal being Appeal No.
Against the companymunication dated 21st July, 2011 of the appellant and the order dated 24th June, 2011 passed by the Whole Time Member of the appellant.
The office of the respondent was duly visited and inspected by the appellant.
The Whole Time Member also directed the appellant to take a decision on the basis of the details provided by the respondent in pursuance of the order, latest by 15th August, 2011, in accordance with law.
However, in spite of repeated requests, the necessary registration was number granted.
The respondent through a letter dated 1st September, 2009 again informed the appellant that their promoter M s. Coment Mauritius Limited had the companytinuous net worth of Rs.
Under the CRA Regulations, 1999, a CRA had been defined as a body companyporate, which is engaged or proposes to be engaged in the business of rating of securities offered by way of public or rights issue.
Still number satisfied, the appellant through an e mail dated 1st September, 2009 5.36 PM directed the respondent to furnish the Audited Annual Accounts of the promoters of the appellant companypany for the previous five years prior to the filing of the application with SEBI.
The CRA Regulations, 1999 inter alia, companytain Regulations pertaining to the registration of credit rating agencies, application for grant of initial and permanent certificate, eligibility criteria for promoter s of the credit rating agency, furnishing of information, clarification and personal representation by the promoter s , grant of certificate by SEBI, its companyditions, and procedure for refusal of certificate and its effect.
SEBI has also prescribed a Code of Conduct to be followed by the CRAs in the aforesaid regulations.
The certificate was enclosed with the aforesaid letter.
SURINDER SINGH NIJJAR, J. The present appeal under Section 15Z of the Securities and Exchange Board of India Act, 1992 the SEBI Act is directed against the impugned judgment and final order dated 9th November, 2011 passed by the Securities Appellate Tribunal, Mumbai the SAT , in Appeal No.
It appears that till 1st March, 2011, the appellant was number satisfied with the efforts made by the respondent to supply the necessary Audited Accounts and issued Show Cause Notice as to why the application for registration should number be rejected in terms of Regulation 11 1 of the CRA Regulations, 1999.
