BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. VKV/DL/AO-46/2016
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 Sona Koyo Steering Systems Ltd.
(PAN-AABCS7787C)
UGF-6 Indraprakash 21, Barakhamba Road,
New Delhi-110001
In the matter of Non-redressal of investor grievance(s)
BACKGROUND
1. Securities and Exchange Board of India (hereinafter referred to as "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 (hereinafter referred to as
"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
(hereinafter referred to as "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 M/s Sona Koyo Steering Systems Ltd. (hereinafter
referred to as "Noticee/the Company") did not submit the details to SEBI which were
required to be furnished in terms of the said Circular.

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2. 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 one (01)
investor complaint was pending against the Noticee as on July 22, 2012.
3. It was alleged that by not submitting the details for authentication as required by the
Circular, Noticee did not obtain the user id and password which was essential for
accessing the complaints pertaining to it, as uploaded on the SCORES for redressing the
investors grievances and subsequent redressal thereof, within specified time. Thus, it
was alleged that Noticee had failed to redress the investor grievances which renders the
Noticee liable for imposition of penalty under Section 15C of the Securities and Exchange
Board of India Act, 1992 (hereinafter referred to as 'SEBI Act').
APPOINTMENT OF ADJUDICATING OFFICER
4. Shri Ram Mohan Rao was appointed as the Adjudicating Officer vide order dated August
22, 2012 under section 15-I of SEBI Act and Rule 3 of SEBI (Procedure for Holding Inquiry
and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as
Adjudication Rules) to inquire and adjudge under Section 15C of the SEBI Act, 1992,
the alleged violations committed by the Noticee. Subsequent to the transfer of Shri Ram
Mohan Rao, the undersigned was appointed as Adjudicating Officer vide order dated June
25, 2013.
SHOW CAUSE NOTICE, REPLY AND HEARING
5.

A Show Cause Notice (herein after referred to as SCN) was issued to the Noticee in
terms of the provisions of Rule 4(1) of SEBI (Procedure for Holding Inquiry and
Imposing Penalties by Adjudicating Officer) Rules, 1995 to show cause as to why an

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February 22, 2016

inquiry be not held against it in terms of rule 4 of the Rules read with section 15I of
SEBI Act, 1992 and penalty be not imposed under section 15C of SEBI Act, 1992 for the
violations alleged to have been committed by the Noticee.
6.

find

from

the

records

that

the

aforesaid

SCN

bearing

No.

SEBI-

NRO/AO/VKV/DL/236/2016 dated February 02, 2016 was sent at the registered office
address of the Noticee at UGF-6 Indraprakash 21, Barakhamba Road, New Delhi110001. The said SCN was duly delivered to the Noticee through the Department of
Post.
7.

Noticee vide e-mail dated February 09, 2016 had submitted its reply in the matter,
which inter alia stated as under:

8.

".....with reference of the captioned subject, we would like to inform you that
Company is registered with SCORES since 2011. From 2011 till date the Company
has received only 28 nos. of investor grievances through SCORES, which were duly
replied/attended by the Company within the period of thirty days.
The last grievance received by the Company through SCORES was on 17 August
2015 which was duly responded by the Company on 21st August 2015.
To support our aforesaid assertion, we are enclosing herewith the details of all the
28 nos. of grievances received by us through SCORES till date.

In the interest of natural justice and in order to conduct an inquiry in terms of rule 4(3)
of the Adjudication Rules, the Noticee was granted an opportunity of personal hearing
Vide Hearing notice no: SEBI-NRO/OW/AO/VKV/DL/HN/241/2016 dated February
09, 2016 at SEBI-NRO, New Delhi on February 16, 2016. The said Notice of hearing was
duly served to the Noticee through the Department of Post.
PERSONAL HEARING

9.

On the scheduled date of personal hearing, Mr. Sushil Jamb, Dy Manager appeared as
Authorised Representative (AR). During the hearing, the AR made the following
submissions, which inter alia, stated as under:

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February 22, 2016

.We reiterate the submissions made by the Noticee vide letter dated September
05, 2015. Further, the pending complaint of the complainant has been resolved by
the Company.
We have no further submissions to make in the matter. ........

ISSUES FOR CONSIDERATION

10.

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

11.

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?

12.

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. In this regard, from the submissions of the
Noticee I note that it had provided details for authentication for SCORES user id &
password on June 15, 2011.

13.

With regard one (01) pending investor complaints mentioned in the SCN, the Noticee
though its submissions contended From 2011 till date the Company has received only
28 nos. of investor grievances through SCORES, which were duly replied/attended by

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February 22, 2016

the Company within the period of thirty days. Subsequently, SEBI has also confirmed
that the Noticee had obtained SCORES authentication and had resolved the pending
investor grievance (as mentioned in the SCN).
14.

Since, the Noticee had obtained SCORES authentication and had taken necessary steps
of resolving the pending investor grievance(s); 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?
15.

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.

16.

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?

17.

Since, the Noticee is not liable for monetary penalty in the instant matter, this issue
deserves no consideration.

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February 22, 2016

18.

In view of my findings noted in the preceding paragraphs, I hereby dispose of the

Adjudication Proceedings initiated against M/s Sona Koyo Steering Systems Ltd vide
Show Cause Notice dated February 02, 2016.

19.

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 M/s Sona Koyo Steering Systems Ltd and also to Securities and Exchange Board
of India.

Date: February 22, 2016

Vijayant Kumar Verma

Place: New Delhi

Adjudicating Officer

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February 22, 2016