SAT Overturns SEBI's Penalty, Market Ban on Bombay Dyeing in Fraud Case

• The Securities Appellate Tribunal (SAT) set aside SEBI's October 2022 order against Bombay Dyeing, its promoters, and related entities, including the Wadia family.
• SEBI had accused Bombay Dyeing of inflating revenue and profits by fraudulently selling flats to group firm SCAL Services Ltd. between FY2011-12 and FY2017-18.
• The market regulator had imposed a cumulative penalty of Rs 15.75 crore and barred ten entities from the securities market for up to two years.
• SAT's majority ruling found no evidence of a fraudulent scheme, stating MoUs were genuine and SCAL-sold flats reached end-buyers, rejecting SEBI's related party treatment of SCAL.
• Justice PS Dinesh Kumar dissented, arguing SCAL was an extended arm of Bombay Dyeing and profit booking based on MoUs was misleading, constituting market abuse.

Why It Matters: SAT provided significant relief to Bombay Dyeing by overturning SEBI's fraud allegations, penalties, and market ban.