SAT Quashes SEBI Penalties in SGTL Manipulation Case, Slams Regulator for 10-Year Delay

May 8, 2026 : The Securities Appellate Tribunal (SAT), Mumbai, has quashed penalties imposed by the Securities and Exchange Board of India (SEBI) against several individuals in connection with alleged price manipulation in the shares of Shree Global Tradefin Limited (SGTL), holding that the proceedings suffered from “inordinate delay.”

A Bench comprising Justice P.S. Dinesh Kumar, Presiding Officer, along with Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar, allowed Appeal Nos. 711 and 712 of 2022 on May 8, 2026.

The case arose from SEBI’s investigation into trading activities in SGTL shares between August 29, 2011 and March 30, 2012. According to SEBI, certain traders had repeatedly placed buy orders at prices above the Last Traded Price (LTP), allegedly causing an artificial rise in the stock price. SEBI claimed that the scrip surged nearly 66% within 17 trading days before sharply declining.

SEBI had issued a third show cause notice (SCN) on February 12, 2021 and later imposed monetary penalties through an adjudication order dated May 31, 2022. The appellants challenged the order before SAT, arguing that SEBI initiated proceedings nearly a decade after the alleged transactions.

The Tribunal noted that SEBI had conducted three separate investigations concerning the same scrip for overlapping periods between 2009 and 2012. SAT observed that earlier proceedings connected to the same scrip had already been set aside on the ground of delay.

Criticising the regulator’s conduct, the Tribunal recorded that the first Adjudicating Officer appointed in 2015 “slept over the matter till his retirement,” after which another officer proceeded with the case. SAT held that SEBI’s decision to continue with the third SCN despite earlier judicial findings on delay amounted to “flagrant disrespect” to the Tribunal’s previous ruling.

Allowing the appeals, SAT ruled that the matter deserved to be set aside solely on the ground of delay and consequently quashed the impugned order.

Cause Title: Mahesh Somabhai Desai & Ors. v. Securities and Exchange Board of India and connected appeal

Case No.: Appeal Nos. 711 of 2022 and 712 of 2022

Coram: Justice P.S. Dinesh Kumar (Presiding Officer), Meera Swarup (Technical Member) and Dr. Dheeraj Bhatnagar (Technical Member)