Adjudication Order Against Complex Trading Company Limited in The Matter of SCORES

In the matter of SCORES Adjudications - Adjudication Order No.
: SM/AO3/2014 dated August 12, 2014

Adjudication Order in the matter of Complex Trading Company Limited.Page 1 of 6
BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA
(ADJUDICATION ORDER NO.: SM/AO3/2014)
__________________________________________________________________________

UNDER SECTION 15 - I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY
ADJUDICATING OFFICER) RULES, 1995.
In respect of:
COMPLEX TRADING COMPANY LIMITED
(PAN Not Available)
Regd. Office at:
3A, GRASTIN PLACE,
KOLKATA - 700001

In the matter of SCORES

Background:

1. Securities and Exchange Board of India (hereinafter referred to as SEBI) vide
Circulars No. CIR/OIAE/1/2012 dated August 13, 2012 and CIR/OIAE/1/2013
dated April 17, 2013 had directed all listed companies to obtain SEBI Complaints
Redressal System (SCORES) authentication and also redress the pending
investor grievances within the stipulated time period.

2. SEBI observed that certain companies including Complex Trading Company
Limited(hereinafter referred to as 'the Noticee/the Company') had neither
obtained the SCORES authentication nor redressed the grievance of investor(s)
and therefore, had failed to comply with the aforesaid SEBI Circulars.

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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO3/2014 dated August 12, 2014
3. Thereafter, vide letter dated July 18, 2013, the aforesaid companies were again
advised to submit the requisite information regarding SCORES authentication and
redress the pending investor complaints by August 05, 2013. However, the
Noticee once again failed to comply with the SEBI directive.

4. Based on the aforesaid observations, it was alleged that by failing to obtain
SCORES authentication and to redress the pending investor grievances the
Noticee has violated the aforesaid SEBI Circulars No. CIR/OIAE/1/2012 dated
August 13, 2012 and CIR/OIAE/1/2013 dated April 17, 2013. The alleged violation,
if established, makes the Noticee liable for monetary penalty under Sections 15HB
and 15C of the Securities and Exchange Board of India Act, 1992 (hereinafter
known as 'SEBI Act').

Appointment of Adjudicating Officer:

5. The undersigned was appointed as Adjudicating Officer under section 15-I of the
SEBI Act read with Rule 3 of the SEBI (Procedure for Holding Inquiry and
Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as
Adjudication Rules), to inquire into and adjudicate under Section 15HB and
15C of the SEBI Act, the alleged violations by the Noticee.

Show Cause Notice, Reply of Noticee and Personal Hearing:

6. A Show Cause Notice SEBI/ERO/SM/ADJ/3428/2014 dated January 30, 2014
(hereinafter referred to as SCN) was issued to the Noticee under Rule 4 (1) of
the Adjudication Rules, to show cause as to why an inquiry be not held against the
Noticee and penalty be not imposed under Sections 15HB and 15 C of the SEBI
Act, for the violations alleged to have been committed by the Noticee, namely,
failure to obtain SCORES authentication and failure to redress pendinginvestor
grievances. The copies of the documents/evidence relied upon in the SCN were
provided to the Noticee along with the SCN.

7. The said SCN was sent at the last known address(s) [registered office] of the
Noticee through Postal Department, which was however returned undelivered.
Therefore, as per extant legal procedures, the SCN was affixed at the last known

address of the Noticee. In the said SCN, the Noticee was asked to reply within a
period of 21 days. However, no reply was received from the Noticee.

8. For the purpose of an inquiry, a notice of hearing was issued to the Noticee
advising them to appear for a personal hearing. The Hearing Notice was returned
undelivered by the Postal Department. Therefore, as per extant legal procedures,
the Hearing Notice was affixed at the last known address of the Noticee. The
Noticee failed to appear on the scheduled date of hearing. In view of the principles
of natural justice, another opportunity of personal hearing was granted to the
Noticee. The Noticee once again failed to appear on the scheduled date of
hearing.

9. In the aforesaid SCN/notices of hearing, it was clearly indicated that in case of
failure to submit reply or to appear for the hearing, the case would be decided ex
parteon the basis of the material available on records. Till date, no reply or
communication has been received from the Noticee.

10. I am of the view that the principles of natural justice have been conformed to,
since sufficient opportunities have been provided to the Noticee to submit reply
and to appear for hearing which the Noticee has failed to avail of.Therefore, the
present proceedings against the Noticeeare undertaken ex-parteon the basis of
available documents and information.

Consideration of Issues and Finding:

11. I have examined the SCN and other documents available on record.

12. The issues that arise for consideration in the present case are :
a) Whether the Noticee by failing to obtain SCORES authentication and by failing
to redress the investor grievances has violatedthe aforesaid SEBI Circulars?
b) Does the violation, if any, on the part of the Noticee attract monetary penalty
under Sections 15HB and 15C of the SEBI Act?
c) If so, what would be the monetary penalty that can be imposed taking into
consideration the factors mentioned in Section 15J of the SEBI Act?


13. It is observed from the records that one complaint is pending against the Noticee.
It is also observed from the available records that SEBI had advised the Noticee to
furnish the authentication details for implementation of SCORES within a specific
time period as per the format/annexure enclosed with the said Circulars (in both
hard copy and soft copy) and toresolve the investor grievance in SCORES. It was
also stipulated that failure on the part of the company to update the ATR in
SCORES, would be treated as non-redressal of investors' complaints.

14. The particulars of entire allegations are not in dispute as no reply is received from
the Noticee (being a listed company) towards the SCN. In absence of any
reply/evidence from the Noticeerefuting the allegations and/or any other evidence
to the contrary, it is concluded that the Noticee had neither obtained the SCORES
authentication nor resolved the pending grievance of the investor/complainant.
The fact cannot be ignored that being a listed company, the Noticee neither
responded to the letters and SCN issued by SEBI, nor appeared for hearing in the
instant proceedings.

15. In view of the above, I am of the opinion that the Noticee had failed to abide by the
directives issued by SEBI vide Circulars No. CIR/OIAE/1/2012 dated August 13,
2012 and No. CIR/OIAE/1/2013 dated April 17, 2013. Therefore, the alleged
violation of the provisions of the aforesaid SEBI Circulars by the Noticee as
specified in the SCN stand established.

16. The Honble Supreme Court of India in the matter of SEBI vs. Shri Ram Mutual
Fund [2006] 68 SCL 216(SC) and (2006) 131 Comp. Cas. 591 (SC) held that:
In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as
contemplated by the Act and the Regulations is established and hence the intention of the parties
committing such violation becomes wholly irrelevant.

17. In view of the above violation, the Noticee is liable for monetary penalty under
Sections 15HB and 15C of the SEBI Act, which read as follows:

15HB.Penalty for contravention where no separate penalty has been provided.-

15HB.Whoever fails to comply with any provision of this Act, the rules or the regulations made or
directions issued by the Board thereunder for which no separate penalty has been provided, shall be liable to
a penalty which may extend to one crore rupees.

15C.Penalty for failure to redress investors grievances.
15C. 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.

18. While determining the quantum of penalty under Section 15 HB of SEBI Act, it is
important to consider the factors stipulated in Section 15J of SEBI Act, which
reads as under:-

15J.Factors to be taken into account by the adjudicating officer:
15J.While adjudging quantum of penalty under section 15-I, the adjudicating officer shall have due regard
to the following factors, namely:-
(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a
result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the default;
(c) the repetitive nature of the default.

19. It is difficult, in cases of such nature, to quantify the disproportionate gains or
unfair advantage enjoyed by an entity because of the default and also the
magnitude of consequent losses suffered by the investors. I note that there wasan
investor complaint pending against the Noticee. In the absence of complete
details, it is difficult to quantify the quantum of penalty. However, the lack of due
diligence demonstrated by the Noticee is a risk to the securities market and thus
loss to the investors to that extent.

ORDER

20. In view of the above, after considering all the facts and circumstances of the case
and exercising the powers conferred upon me under Section 15 I of the SEBI Act
and Rule 5 of the Adjudication Rules, I hereby impose a penalty of Rs.1,50,000/-

(Rupees One Lakh Fifty Thousands) only under the provisions of Section 15HB of
the SEBI Act and Rs.1,50,000/- (Rupees One Lakh Fifty Thousands) only under
the provisions of Section 15C of the SEBI Act, on the Noticee, thereby resulting
into consolidated penalty of Rs.3,00,000/- (Rupees Three Lakhs) only. I am of the
view that the said penalty would be commensurate with the aforesaid failure
committed by the Noticee.

21. The Noticee shall pay the said amount of penalty by way of demand draft in favour
of SEBI - Penalties Remittable to Government of India, payable at Mumbai,
within 45 days of receipt of this order. The Demand Draft shall be forwarded to the
Regional Director, Securities and Exchange Board of India, Eastern Regional
Office, L & T Chambers, Third Floor, 16, Camac Street, Kolkata - 700017.

22. Copy of this order is being sent to the Noticee and also to the SEBI, in terms of
the Adjudication Rules.

Date:August 12, 2014 SOMA MAJUMDER
Place: Kolkata ADJUDICATING OFFICER


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In the matter of SCORES Adjudications - Adjudication Order No.

: SM/AO3/2014 dated August 12, 2014

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