SEBI to fund Satyam shareholders' legal battle
By siliconindia   |   Thursday, 11 June 2009, 21:16 IST   |    5 Comments
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SEBI to fund Satyam shareholders' legal battle
Mumbai: The Securities and Exchange Board of India (SEBI) for the first time, will provide the legal aid to thousands of investors who have been affected or are likely to be affected by the frauds committed by promoters and intermediaries in connection with securities, reports Deccan Chronicle. With regard to this, the SEBI has accepted the application from Midas Touch Investor's Association (MTIA) to fund its case for compensation for Satyam Shareholders, which it filed with the Supreme Court. MTIA has challenged the dismissal of its appeal on behalf of Satyam shareholders for compensation by the National Consumer Dispute Redressal Commission. The new regulations of the Sebi's Investor Protection and Education Fund Regulation 2009, states that the SEBI will provide an aid up to the extent of 75 per cent of the total expenditure on the legal proceedings and this aid will not be considered for more than one legal proceeding in one particular matter. The cases could include deceitful and unfair trade practices, manipulation of the market, default in redemption of securities or in payment of interest in terms of the offer document; mis-statements, misrepresentation or omission in connection with the issue and sale or purchase of securities and other such market misconduct, which may be considered appropriate by the board. However, it does not include any proceeding where the board is a member, or has initiated any enforcement action. "We are not calling it class action suit, but we want to help investors where there is a common cause, an advisory committee has been formed and its first meeting will be held on July 2nd by which time the guidelines will be ready," said MS Sahoo, a full time SEBI member.

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