Sebi and banking

Ritika singh (Querist) 27 November 2014 This query is : Resolved
my clients a bank have been offered pledge of shares as security by a company wherein a director is barred by SEBI under section 11 B of the SEbi Act for his misdoings in respect of another company. the sebi order specifically mentions his name. can we get the pledge agreement executed from some other director and validate the same?

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Devajyoti Barman (Expert) 28 November 2014
Challenge this order before its appellate body.

Anirudh (Expert) 28 November 2014
Dear Ritika,
You have to come clear. What exactly the SEBI Order states?

Ritika singh (Querist) 28 November 2014
Dear sir,

Ritika singh (Querist) 28 November 2014
A person is specifically barred by sebi order under section 11 B to deal in securities indirectly or directly . this person acting as director has offered shares of another company as security for loan. Will this be a dealing in security under sebi act per se by him.if some other person signs the pledge agreement and not this director , will such agreement be valid

Devajyoti Barman (Expert) 28 November 2014
The order can be challenged before the SECURITIES AND EXCHANGE BOARD OF INDIA
(APPEAL TO CENTRAL GOVERNMENT) RULES, 1993
u/s 29 r/w 20 of the SEBI Act

T. Kalaiselvan, Advocate (Expert) 01 December 2014
If this person has been particularly barred by SEBI, he has got no locus standi to pledge the shares by himself though the securities are of the company, it would be better appoint another person to deal with the mortgage loan.

Ritika singh (Querist) 02 December 2014
Thank u sir

Rajendra K Goyal (Expert) 05 December 2014
All the documents including SEBI orders and Bank agreement etc. need to be referred.

Consult a local lawyer dealing in stock Market and SEBI matters and show him all the documents.

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