In the matter of SCORES Adjudications - Adjudication Order No.

: SM/AO12/2014 dated August 12, 2014

Adjudication Order in the matter of Kiev Finance Limited. Page 1 of 6
BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA
(ADJUDICATION ORDER NO.: SM/AO12/2014)
_______________________________________________________________________________

UNDER SECTION 15 - I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY
ADJUDICATING OFFICER) RULES, 1995.

In respect of:

KIEV FINANCE LIMITED
(PAN AACCK4888R)

In the matter of SCORES


Background:

1. Securities and Exchange Board of India (hereinafter referred to as SEBI) vide
Circulars No. CIR/OIAE/1/2012 dated August 13, 2012 and CIR/OIAE/1/2013
dated April 17, 2013 had directed all listed companies to obtain SEBI Complaints
Redressal System (SCORES) authenticationand also redress the pending investor
grievances within the stipulated time period.

2. SEBI observed that certain companies including Kiev Finance Limited(hereinafter
referred to as 'the Noticee/the Company') had neither obtained the SCORES
authentication nor redressed the grievance of investor(s) andthereforehad failed to
comply with the aforesaid SEBI Circulars

3. Thereafter, vide letter dated July 18, 2013, the aforesaid companies were again
advised to submit the requisite information regarding SCORES authentication and
redress the pending investor complaints by August 05, 2013. However, the
Noticee once again failed to comply with the SEBI directive.
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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO12/2014 dated August 12, 2014
Adjudication Order in the matter of Kiev Finance Limited. Page 2 of 6

4. Based on the aforesaid observations, it was alleged that by failing to obtain
SCORES authentication and to redress the pending investor grievances the
Noticee has violated the aforesaid SEBI Circulars No. CIR/OIAE/1/2012 dated
August 13, 2012 and No. CIR/OIAE/1/2013 dated April 17, 2013. The alleged
violation, if established, makes the Noticee liable for monetary penalty under
Sections 15HB and 15C of the Securities and Exchange Board of India Act, 1992
(hereinafter referred to as SEBI Act).

Appointment of Adjudicating Officer:

5. The undersigned was appointed as Adjudicating Officer under section 15-I of the
SEBI Act read with Rule 3 of the SEBI (Procedure for Holding Inquiry and
Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as
Adjudication Rules), to inquire into and adjudicate under Section 15HB and
15C of the SEBI Act, the alleged violations by the Noticee.

Show Cause Notice, Reply of Noticee and Personal Hearing:

6. A Show Cause Notice SEBI/ERO/SM/ADJ/3421/2014 dated January 30, 2014
(hereinafter referred to as SCN) was issued to the Noticee under Rule 4 (1) of
the Adjudication Rules, to show cause as to why an inquiry be not held against the
Noticee and penalty be not imposed under Sections 15HB and 15 C of the SEBI
Act, for the violations alleged to have been committed by the Noticee, namely,
failure to obtain SCORES authentication and failure to redress investor
grievances. The copies of the documents/evidence relied upon in the SCN were
provided to the Noticee along with the SCN.

7. The Noticeesubmitted their reply to the SCN vide letter dated February 13, 2014.
Thereafter, the Noticee was granted an opportunity of personal hearing on April
25, 2014. Shri A. K. Murarka, the Authorized Representative (AR) of the Noticee,
appeared for the hearing and made submissions on behalf of the Noticee,
reiterating the earlier written submissions.

8. The submissions made by the Noticeeare summarized below:
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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO12/2014 dated August 12, 2014
Adjudication Order in the matter of Kiev Finance Limited. Page 3 of 6
The Noticeestated that the records of the company have been seized by the
Official Liquidator as part of the 133 Companies/Firms to secure the dues of
CRB Capital Limited on April, 1997. Subsequent to the seizure of the records
of the company, the Honble Delhi High Court had directed the freezing of
bank accounts of the company and also restrained the Company from
disposing off its properties. The business activities of the company were halted
as a result of the aforesaid Order. After the seizure of the records, the trading
in shares of the Company was suspended by the stock exchanges and
continues till date. The records of the company have not been released by the
Official Liquidator till the date of reply in the instant proceedings. The RTA of
the company has terminated its contract and presently the company does not
have any record of shareholders but effect the transfer and transmission of
shares on the basis of valid documents produced by them. To substantiate the
aforesaid contentions, the relevant documents were also enclosed.
TheNoticee is shown as listed in the stock exchanges but the shares of
continue to remain suspended.
The Noticee had sent the requisite data to SEBI on February 12, 2014 and
had been allotted SCORES Id and password on February 14, 2014.

Consideration of Issues and Finding:

9. I have examined the SCN, and other documents available on record.

10. The issues that arise for consideration in the present case are :
a) Whether the Noticee by failing to obtain SCORES authentication and by failing
to redress the investor grievances has violatedthe aforesaid SEBI Circulars?
b) Does the violation, if any, on the part of the Noticee attract monetary penalty
under Sections 15HB and 15C of the SEBI Act?
c) If so, what would be the monetary penalty that can be imposed taking into
consideration the factors mentioned in Section 15J of the SEBI Act?

11. It is observed that SEBI had advised the Noticee to furnish the authentication
details for implementation of SCORES within a specific time period as per the
format/annexure enclosed with the said Circulars (in both hard copy and soft
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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO12/2014 dated August 12, 2014
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copy)andtoresolve the investors grievances in SCORES. It was also stipulated
that failure on the part of the company to update the ATR in SCORES, would be
treated as non-redressal of investors' complaints.

12. In the instant case, the Noticeehas submitted that their records were seized by the
Official Liquidator and banks accounts frozen by Hon'ble Delhi High Court. The
Noticee has further stated that they were not carrying on any activity for the last
several years. I note that the Noticee, nevertheless, applied for SCORES
authentication on February 12, 2014 and was provided the ID and Password by
SEBI on February 14, 2014. It is also observed that there was one complaint
pending against them. On perusal of the submissions of the Noticee, I find no
justification on their part for delay in obtaining the SCORES authentication, as
required by SEBI.

13. I am of the considered view that violation is clearly established against the Noticee
since they had not complied with the requirements of SCORES within the given
time period. A listed company is expected to comply with the extant regulatory and
statutory requirements. I find that in the instant matter, the Noticee failed to
exercise due care and diligence in discharge of its duty as a listed company and
therefore is liable for penalty.

14. In view of the above, I am of the opinion that the Noticee had failed to abide by the
directives issued by SEBI vide Circulars No. CIR/OIAE/1/2012 dated August 13,
2012 and No. CIR/OIAE/1/2013 dated April 17, 2013. Therefore, the alleged
violation of the provisions of the aforesaid SEBI Circulars by the Noticee as
specified in the SCN stand established.

15. The Honble Supreme Court of India in the matter of SEBI Vs. Shri Ram Mutual
Fund [2006] 68 SCL 216(SC) and (2006) 131 Comp. Cas. 591 (SC) held that:

In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as
contemplated by the Act and the Regulations is established and hence the intention of the parties
committing such violation becomes wholly irrelevant.

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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO12/2014 dated August 12, 2014
Adjudication Order in the matter of Kiev Finance Limited. Page 5 of 6
16. In view of the above violation, the Noticee is liable for monetary penalty under
Sections 15HB and 15C of the SEBI Act, which read as follows:

15HB.Penalty for contravention where no separate penalty has been provided.-
15HB.Whoever fails to comply with any provision of this Act, the rules or the regulations made or
directions issued by the Board thereunder for which no separate penalty has been provided, shall be liable to
a penalty which may extend to one crore rupees.

15C.Penalty for failure to redress investors grievances.
15C. If any listed company or any person who is registered as an intermediary, after having been called
upon by the Board in writing, to redress the grievances of investors, fails to redress such grievances within the
time specified by the Board, such company or intermediary shall be liable to a penalty of one lakh rupees for
each day during which such failure continues or one crore rupees, whichever is less.

17. While determining the quantum of penalty under Section 15 HB of SEBI Act, it is
important to consider the factors stipulated in Section 15J of SEBI Act, which
reads as under:-

15J.Factors to be taken into account by the adjudicating officer:

15J.While adjudging quantum of penalty under section 15-I, the adjudicating officer shall have due regard
to the following factors, namely:-
(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a
result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the default;
(c) the repetitive nature of the default.

18. It is difficult, in cases of such nature, to quantify the disproportionate gains or
unfair advantage enjoyed by an entity because of the default and also the
magnitude of consequent losses suffered by the investors. I note that there was
an investor complaint pending against the Noticee. In the absence of complete
details, it is difficult to quantify the quantum of penalty. However, the lack of due
diligence demonstrated by the Noticee is a risk to the securities market and thus
loss to the investors to that extent.

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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO12/2014 dated August 12, 2014
Adjudication Order in the matter of Kiev Finance Limited. Page 6 of 6
ORDER

19. In view of the above, after considering all the facts and circumstances of the case
and exercising the powers conferred upon me under Section 15 I of the SEBI Act
and Rule 5 of the Adjudication Rules, I hereby impose a penalty of Rs.1,50,000/-
(Rupees One Lakh Fifty Thousands) only under the provisions of Section 15HB of
the SEBI Act and Rs.1,50,000/- (Rupees One Lakh Fifty Thousands) only under
the provisions of Section 15C of the SEBI Act, on the Noticee, thereby resulting
into consolidated penalty of Rs.3,00,000/- (Rupees Three Lakhs) only. I am of the
view that the said penalty would be commensurate with the aforesaid failure
committed by the Noticee.

20. The Noticee shall pay the said amount of penalty by way of demand draft in favour
of SEBI - Penalties Remittable to Government of India, payable at Mumbai,
within 45 days of receipt of this order. The Demand Draft shall be forwarded to the
Regional Director, Securities and Exchange Board of India, Eastern Regional
Office, L & T Chambers, Third Floor, 16, Camac Street, Kolkata - 700017.

21. Copy of this order is being sent to the Noticee and also to the SEBI, in terms of
the Adjudication Rules.






Date:August 12, 2014 SOMA MAJUMDER
Place: Kolkata ADJUDICATING OFFICER

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