BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. JJ/AM/AO9/2015

UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA

ACT, 1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING
INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES,
1995
In respect of:
M/s. Mesco Pharmaceuticals Ltd.
(PAN AAACM8308E)
In the Matter of: Mesco Pharmaceuticals Ltd.
_____________________________________________________________________________________________
BACKGROUND
1. Securities and Exchange Board of India (SEBI) came out with a Circular
dated June 03, 2011 dealing with the processing of investor complaints
against listed companies through SEBI Complaints Redress System
(SCORES). In terms of said Circular, all listed companies were inter alia
required to view the complaints pending against them, redress them and
submit Action Taken Reports (ATRs) electronically in SCORES. As the
SCORES is online electronic system, therefore, for the purposes of
accessing the complaints of the investors against them, as uploaded in the
SCORES, listed companies were required to login to SCORES system
electronically through a company specific user id and password, to be
provided by SEBI. For the purpose of generating said user id and
password, listed companies which were yet to obtain SCORES user id and
password, were required to submit the details for authentication to SEBI,
in the format annexed to the said Circular. However, it was observed that
Mesco Pharmaceuticals Limited (Noticee) did not submit the details to
SEBI which were required to be furnished in terms of the said Circular.
2. In order to further remind the Noticee about the compliance with the
requirements as laid down in the SEBI Circular dated June 03, 2011, letter
dated February 22, 2012 was sent to the Noticee informing about the
commencement of processing of investor complaints in a centralized web
based complaints redress system SCORES in terms of the Circular and
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advising the Noticee to send the information (i.e. details for

authentication) as required in the Circular, at the earliest.
3. As observed from the contents of the Circular, SCORES introduced
electronic dealing of the complaints of the investors, by the respective
companies. Thus, once a complaint against a company was uploaded by
SEBI in the SCORES, it amounted to calling upon by SEBI to such company
to redress the investor grievance. Accordingly, it was incumbent upon
such company to redress the investor complaint. It was observed that two
investor complaints were pending against the Noticee as on August 27,
2012. However, it was alleged that the Noticee failed to redress pending
investor grievance and also failed to obtain SCORES authentication in
spite of being called upon by SEBI to do so thereby violating the
provisions of Section 15C of the SEBI Act, 1992.
4. Shri Praveen Trivedi was appointed as the Adjudicating Officer to inquire
and adjudge under Section 15C of the SEBI Act, 1992, the alleged
violations committed by the Noticee. Pursuant to the transfer of Shri
Praveen Trivedi, the undersigned was appointed as Adjudicating Officer
vide Order dated December 18, 2013.
SHOW CAUSE NOTICE, HEARING & REPLY
5. Show Cause Notice (SCN) in terms of the provisions of Rule 4(1) of SEBI
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules, 1995 (Adjudication Rules) was issued to the Noticee on
July 31, 2013, calling upon the Noticee to show cause why an inquiry
should not be held against it under Rule 4(3) of the Adjudication Rules
read with Section 15I of the SEBI Act, 1992 for the alleged violations.
6. The aforesaid SCN was duly delivered to the Noticee through the
Department of Post. Vide letter dated August 30, 2013 the Noticee
submitted its reply to the SCN and inter alia made the following
submissions:
Since the operations of Mesco Pharmaceuticals Ltd. Came to a standstill for more
than 15 years, due to taking over of factory building and other assets of the
company by the UP State Financial Corporation. Since 15 years, the Staff of the
Company including the finance staff had left the Company. We have no staff
present at the moment.
However, in view of the various constraints, with the assistance of the group
Companys Staff, we have obtained the Score id and Password and settled the
complaints on regular basis and we have no complaint pending as on date.
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Letter dated February 22, 2012 has not been received by us. It might be due to
incorrect address in your records. As and when we received the Circular dated
April 17, 2013, we have immediately obtained the Score id and Password.

7. Subsequent to the appointment of the undersigned, vide Notice dated

December 09, 2014 the Noticee was given an opportunity of personal
hearing on January 06, 2015. On the scheduled date of personal hearing, Ms.
Shweta Priya appeared as Authorised Representative (AR) of the Noticee
and made the following submissions:
We reiterate our submissions made vide letter dated August 30, 2013. We also
would like to intimate that we have taken SCORES authentication on May 14,
2013, i.e., within one month of the SEBI Circular dated April 17, 2013. All the
pending complaints have been resolved before July 31, 2013 (i.e., the date of
Show cause Notice). We are also making written submissions vide letter dated
January 06, 2015. We have no further submissions to make in the matter.

ISSUES FOR CONSIDERATION

8. After perusal of the material available on record, I have the following
issues for consideration, viz.,
A. Whether the Noticee has failed to resolve investor grievances?
B. Whether the Noticee is liable for monetary penalty under Section 15C
of the SEBI Act, 1992?
C. What quantum of monetary penalty should be imposed on the Noticee
taking into consideration the factors mentioned in Section 15J of the
SEBI Act, 1992?
FINDINGS
9. On perusal of the material available on record and giving regard to the
facts and circumstances of the case, I record my findings hereunder.
ISSUE 1: Whether the Noticee has failed to resolve investor
grievances?
10. As already observed, SEBI introduced an online electronic system for
resolution of investor grievances, i.e., SCORES in 2011. For the purposes
of accessing the complaints of the investors against them, as uploaded in
the SCORES, listed companies were required to login to SCORES system
electronically through a company specific user id and password, to be
provided by SEBI. Further, vide letter dated February 22, 2012 the
Noticee was informed about the commencement of SCORES and the
Noticee was advised to send the details for authentication as required in
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the Circular. In this regard, the Noticee vide its letter dated January 06,
2015 has submitted that it had made an application for obtaining SCORES
user id and password vide email dated May 14, 2013 and received
SCORES authentication vide email dated May 15, 2013. Regarding the two
pending investor complaints, as mentioned in the SCN, the Noticee has
stated that it had resolved them on July 25, 2013. Subsequently, SEBI has
also confirmed that the Noticee had obtained SCORES authentication on
May 15, 2013 and had resolved the pending investor grievances (as
mentioned in the SCN) on July 25, 2013.
11. Since, the Noticee had obtained SCORES authentication and had taken
necessary steps of resolving the pending investor grievance before the
issuance of SCN; I hold that the allegation of not resolving investor
grievances, as alleged in the SCN, does not stand established.
ISSUE 2: Whether the Noticee is liable for monetary penalty under
Section 15C of the SEBI Act, 1992?
12. The provisions of Section 15C of the SEBI Act, 1992, read as under:
15C Penalty for failure to redress investors' grievances: 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.
13. Since the allegation against the Noticee of not resolving the investor
grievance pending against it has not been established; therefore, the
Noticee is not liable for monetary penalty under Section 15C of the SEBI
Act, 1992.
ISSUE 3: What quantum of monetary penalty should be imposed on the
Noticee taking into consideration the factors mentioned in Section 15J
of the SEBI Act, 1992?
14. Since, the Noticee is not liable for monetary penalty in the instant matter,
this issue deserves no consideration.

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ORDER
15. In view of my findings noted in the preceding paragraphs, I hereby
dispose of the Adjudication Proceedings initiated against the Noticee vide
Show Cause Notice dated July 31, 2013.
16. In terms of the provisions of Rule 6 of the SEBI (Procedure for Holding
Inquiry and Imposing Penalties by Adjudicating Officer) Rules 1995,
copies of this Order are being sent to the Noticee and also to Securities
and Exchange Board of India.

Date: January 30, 2015

Place: Mumbai

Jayanta Jash
Adjudicating Officer

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