Supreme Court Upholds SAT Order Quashing SEBI Penalty On Apollo Tyres

The Supreme Court on Monday upheld an order of the Securities Appellate Tribunal, which had set aside a Rs 65 lakh penalty against Apollo Tyres Ltd. for an alleged violation of share buyback norms.

The court said that it was not inclined to interfere with SAT's order, in view of the long delay in filing a show cause notice against Apollo Tyres.

The alleged violation of buyback norms dates back to 2003. However, the Securities and Exchange Board of India issued a show-cause notice to Apollo Tyres in 2014, almost 11 years after the alleged contravention.

Observing that SEBI files an appeal against every SAT order that does not go in its favour, the top court said that an affidavit must be filed before it, with a list of every case that has been appealed against.

Appearing for the markets regulator, Solicitor General Tushar Mehta said that an appeal is not filed against every order of the SAT.

The orders go through a screening process and only then are they appealed against before the appropriate forum, Mehta said.

The case pertains to a penalty imposed on the tyre manufacturer in 2018, over alleged violation of share buyback norms.

Apollo Tyres had not followed any of the protocols for buying back shares, as specified under the buyback regulations, according to SEBI.

It was alleged that Apollo Tyres' shares were bought back by the company and its founders, which was against the Companies Act and SEBI regulations.

However, the SAT was not inclined to accept these contentions and overturned the penalty that was imposed by the markets regulator.