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Sunday, Jul 24, 2005
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Markets - Economic Offences
SAT chief quits amid UBS controversy
SEBI to replace counsel; hearing on Aug 2
Mumbai , July 23
IN the latest twist to the UBS Securities case pertaining to last year's stock market crash, the Presiding Officer of the Securities Appellate Tribunal (SAT), Mr Kumar Rajaratnam, has resigned from the appellate. Whether the resignation will be accepted or not will be known only next week.
UBS Securities' appeal against the SEBI order banning it from issuing participatory notes for a period of one year starting on May 17 is being heard by the tribunal since July 18.
On Monday (July 18), Mr Rajaratnam had suggested that if both parties were amenable, the case could head for adjudication and UBS can pay a penalty of around Rs 50 crore and resume its participatory notes activities in India. He saw it as a measure to expedite the proceedings of the case. SEBI's counsel was expected to let the tribunal know its decision on Tuesday.
On Tuesday (July 19), UBS Securities' counsel was to wrap up his side of the arguments in an hour and SEBI's counsel was to begin his arguments. However, the UBS arguments went on all day and SEBI did not confirm its acceptance or rejection of the adjudication suggestion.
On Wednesday (July 20), media reports quoted SEBI counsel, Mr Rohit Kapadia, saying that SEBI was not interested in the suggestions (for adjudication) made by SAT and would like the case to continue. On the same day, Mr Rajaratnam reclused himself from hearing the case. He said that SEBI chose to inform the press without first informing the court about the outcome of its deliberation about adjudication. "Since the suggestion came from me, it would not be appropriate for me to hear the matter and I recluse myself from the case," he had said.
SEBI, meanwhile, dissociated itself from the comments made by its legal counsel.
On Friday (July 22), it was understood that SEBI had decided to change its legal counsel and Mr Kapadia was to be replaced with a Delhi-based counsel. To aid this, the hearing of the case, which was scheduled for July 25 was shifted to August 2.
On Saturday (July 23), Mr Rajaratnam resigned from his post as Presiding Officer of SAT.
As Mr Rajaratnam has already reclused himself from hearing the UBS Securities case, it is presumed that the hearing would go on as scheduled on August 2 with the two remaining members of the tribunal hearing it. But with the pace at which events have unfurled in the case so far, there could be other developments that may determine the course the case would take over the next few weeks.
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