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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA


ADJUDICATION ORDER NO. JJ/AM/AO11/2015

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. Jindal Polyesters Ltd. (Now known as Jindal Poly Films Ltd.)
(PAN AAACJ7650E)
In the Matter of: Jindal Polyesters 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
Jindal Polyesters Limited (Now known as Jindal Poly Films Ltd.)
(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 April 18, 2012 was sent to the Noticee informing about the
commencement of processing of investor complaints in a centralized web
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based complaints redress system SCORES in terms of the Circular and


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 one
investor complaint was 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 29, 2013 the Noticee
submitted its reply to the SCN and inter alia made the following
submissions:
With reference to the above mentioned show cause notice, we would like to inform
that Mr. Sant Ram, a shareholder complained the company for non receipt of his
share certificate. Our share transfer agent Karvy Computershare Private Limited
vide their letter dated 23rd August, 2011 informed to the investor that share
certificates no. 13521 and 23414 for 200 Shares have been dispatched on 25th
September, 2010 and were not returned as undelivered. The Registrar also advised
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the investor that, if the share certificates were lost or misplaced then duplicate
share certificates can be issued. The registrar also sent the procedure of issue of
duplicate share certificates. Please note that the investor concerned has neither
applied for duplicate share certificate nor contacted the Company or Registrar in
this regard.
On receipt of your letter RTA and Company contacted the investor through
telephone and came to know that it was misplaced by him during the process of
dematerialization. On 13th August 2013, RTA further communicated with the
investor and forwarded procedure of issue of duplicate share certificate as
requested by the investor. We are awaiting the required documents, duly filled and
signed from the investor and will do the needful immediately.
We bring to your kind notice that till date there is no pending complaint in
SCORES.

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,
Shri Sanjeev Kumar, Company Secretary, appeared as Authorised
Representative (AR) of the Noticee and made the following submissions:
We reiterate the submissions made vide letter dated August 29, 2013. We are
making further submissions vide letter dated January 06, 2015. We have no
further submissions to make in the matter.
We have taken SCORES authentication sometime in 2012. One pending
complaint as referred in the Show Cause Notice has already been resolved. The
complaint was regarding issue of duplicate shares, for which we had issued
necessary reply to the investor in 2011 only. After submission of the necessary
documents by the investor in April 2014, we have issued duplicate shares to the
investor in July 2014. As on date no complaint is pending as per SCORES
database.

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.

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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 April 18, 2012 the Noticee
was informed about the commencement of SCORES and the Noticee was
advised to send the details for authentication as required in the Circular.
In this regard, from the submissions of the Noticee I note that it had
provided details for authentication for SCORES user id & password in May
2012. Regarding the one pending investor complaint which was relating
to non-receipt of shares, as mentioned in the SCN, the Noticee has stated
that it had furnished the necessary reply to the investor in 2011 only and
when the investor submitted required documents (i.e., affidavit,
indemnity bond, etc.) in 2014, the duplicate share certificates were sent
to the investor. Subsequently, SEBI has also confirmed that the Noticee
had obtained SCORES authentication on May 14, 2012 and had resolved
the pending investor grievance (as mentioned in the SCN) on June 11,
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.

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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.
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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