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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO6/2014 dated August 12, 2014
Adjudication Order in the matter ofCoronet Industries Limited.Page 1 of 5
BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO.SM/AO6/2014]


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 ofCoronet IndustriesLimited
(PAN AABCC2872L)
In the matter of SCORES

FACTS OF THE CASE IN BRIEF
1. Securities and Exchange Board of India (hereinafter referred to as SEBI) had issued
Circular No. CIR/OIAE/2/2011 dated June 3, 2011 regarding commencement of SEBI
Complaints Redress System (SCORES) and advising all companies, whose securities
are listed on various stock exchanges, to comply with the provisions of the said
circular. Subsequently, vide Circular No. CIR/OIAE/1/2012 dated August 13, 2012,
SEBI once again advised all companies, whose securities were listed on stock
exchanges, to obtain SCORES authentication by September 14, 2012 failing which
SEBI would be constrained to initiate action against them.

2. It was observed by SEBI that certain companies including M/s Coronet Industries
Limited (hereinafter referred to as 'Noticee') had failed to obtain SCORES
authentication within the timeline stipulated under the aforementioned Circular No.
CIR/OIAE/1/2012 dated August 13, 2012. Thereafter SEBI,through an advertisement
in the newspapersdated October 20, 2012,advised these companies to get SCORES
authentication within 7 days. However, it was noted by SEBI that the Noticee failed to
obtain SCORES authentication even then.

3. Based on the aforesaid observations, it was alleged that by failing to obtain SCORES
authentication, the Noticee has violatedthe aforesaid SEBI Circular No.
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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO6/2014 dated August 12, 2014
Adjudication Order in the matter ofCoronet Industries Limited.Page 2 of 5
CIR/OIAE/1/2012 dated August 13, 2012. The alleged violation, if established, makes
the Noticee liable for monetary penalty under section 15 HB of the Securities and
Exchange Board of India Act, 1992 (hereinafter referred to as SEBI Act).

APPOINTMENT OF ADJUDICATING OFFICER

4. The undersigned was appointed as Adjudicating Officer under section 15-I of SEBI
Act and rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995 (hereinafter referred to as Rules) to enquire into
and adjudicate under section 15HB of SEBI Act for the alleged violation by the
Noticee.

SHOW CAUSE NOTICE, REPLY OF NOTICEE AND PERSONAL HEARING

5. A Show Cause Notice No. SEBI/ERO/SM/ADJ/7081/2013dated March 22, 2013
(herein after referred to as SCN) was issued to the Noticee under rule 4 of the Rules
to show cause as to why an inquiry be notheld against them in terms of rule 4 of the
Rules read with section 15-I of SEBI Act and penalty be not imposed under section
15HB of SEBI Act for the violations alleged to have been committed by the Noticee.
The copies of the documents relied upon in the SCN were provided to the Noticee
along with the SCN.

6. The Noticeesubmitted their reply to the SCN vide letter dated April 05, 2013.
Thereafter, the Noticee was granted an opportunity of personal hearing on August 07,
2013. Shri A. Jain, the Authorized Representative (AR) of the Noticee appeared for
the hearing, and made submissions on behalf of the Noticee, reiterating their earlier
written submissions.

7. The submissions made by the Noticeeare summarized below:
The Noticeewas not aware of the compliance relating to SCORES as the
person who was dealing with the SEBI compliance issues had left the job. The
Noticee neither came across any circular nor any public notice in newspapers
in this regard.
It was only in the month of December 2013 that the Noticee became aware of
such requirement while visiting the office of the Calcutta Stock Exchange.
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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO6/2014 dated August 12, 2014
Adjudication Order in the matter ofCoronet Industries Limited.Page 3 of 5
The Noticeehad immediately sent the requisite data to SEBI on December 17,
2012 and obtained SCORES authentication on December 17, 2012. The
Noticee had also intimated the Calcutta Stock Exchange regarding their
compliance with SCORES.

CONSIDERATION OF ISSUES AND FINDINGS

8. I have examined the SCN, the reply and the submissions of the Noticee, and other
information and documents available on record.

9. The issues that arise for consideration in the present case are :
a) Whether the Noticee by failing to obtain SCORES authentication has failed to
comply with SEBI circular No. CIR/OIAE/1/2012 dated August 13, 2012?
b) Does the violation, if any, on the part of the Noticee attract monetary penalty
under Section 15 HB 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?

10. In the instant case, it is evident from the material available on record that the Noticee
had not complied with the SEBI Circular no. CIR/OIAE/1/2012 dated August 13, 2012.
It obtained the SCORES authentication only on December 17, 2012, i.e. nearly after
two months after the stipulated time period. In view of the foregoing, the alleged
violation of the provisions of the aforesaid SEBI circular by the Noticee as specified in
the SCN stands established.

11. I am of the view that the violation is clearly established against the Noticee.The
statement that the Noticee were ignorant ofthe regulatory provisions is not justified. It
is a well established legal maxim that "Ignorantiajuris non excusat", or "ignorance of
the law excuses no one". A listed company is expected to comply with the extant
regulatory and statutory requirements. I find that in the instant matter, the Noticee
failed to exercise reasonable care and diligence in discharge of its duty as a listed
company and therefore is liable for penalty.


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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO6/2014 dated August 12, 2014
Adjudication Order in the matter ofCoronet Industries Limited.Page 4 of 5
12. 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.

13. In view of the aforementioned violation, the Noticee is liable for monetary penalty
under Section 15HB of SEBI Act which reads as follows:

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

14. 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:-

15JFactors to be taken into account by the adjudicating officer:
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.

15. 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 areno investor
complaints 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. I observe that default by the Noticee occurred on continuous
basis for more than 2 months and hence may be considered repetitive.

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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO6/2014 dated August 12, 2014
Adjudication Order in the matter ofCoronet Industries Limited.Page 5 of 5
ORDER

16. After taking into consideration all the facts and circumstances of the case, I impose a
penalty of Rs.1,20,000/- (Rupees One Lakh and Twenty Thousand) onlyunder
Section 15 HB of the SEBI Act against the Noticee which will be commensurate with
the violations committed by it.

17. 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 said demand draft should be forwarded to the
Regional Director, SEBI Eastern Regional Office, 16, Camac Street, 3rd. Floor, Unit
301, Kolkata 700017.

18. In terms of Rule 6 of the Rules, copy of this order is sent to the Noticee also to the
Securities and Exchange Board of India.




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


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