SEBI challenges SAT relief for SICCL managers in Supreme Court

The case tests whether executing decisions under a director's authority absolves employees of legal responsibility in a public-offer violation. If the Supreme Court sides with SEBI, the four managers and company secretary could face personal liability for the refund. That would mark a shift in how Indian courts treat mid-level executives in securities law violations.

The outcome could set a precedent for compliance officers, company secretaries, and other employees who sign documents under power of attorney. Companies may need to review their internal delegation structures if the court holds that employees can be personally liable even when acting on directors' instructions.

The Sahara group has been in a long-running legal battle with SEBI over the OFCDs. The Supreme Court had earlier ordered Sahara to refund investors. This latest appeal narrows the question to employee liability within that larger case.

SEBI's 2018 order had directed SICCL to refund the money, disclose inventory details, and debar certain officials from the securities market. The SAT order partially upheld SEBI's directive. It granted relief to the employees. SEBI now wants the Supreme Court to restore the full scope of its original order.

The Supreme Court will first consider whether to grant SEBI leave to appeal the SAT order. If it does, the case moves to a full hearing on the employee-liability question. If it dismisses the petition, SAT's relief for the four managers and the company secretary stands.

The hearing is scheduled for June 18.