BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

(ADJUDICATION ORDER NO: AO/VKV/04/2015)
UNDER SECTION 15 - I OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA ACT, 1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE
BOARD OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING
PENALTIES BY ADJUDICATING OFFICER) RULES, 1995.
In respect of:
Naina Semiconductor Ltd.
PAN No:AAACN9845R
D-95, Sector-63
Noida-201301(UP)
-----------------------------------------------------------------------------------------------------------------Background:
1. Securities and Exchange Board of India (hereinafter referred to as SEBI) observed that
M/s. Naina Semiconductor Ltd. (hereinafter referred to as 'the Noticee / the Company /
"Naina") had neither obtained the SEBI Complaints Redressal System (SCORES)
authentication nor redressed the grievance of investors.
Appointment of Adjudicating Officer:
2. Undersigned was appointed as Adjudicating Officer under section 15-I of the Securities
and Exchange Board of India Act 1992 (hereinafter known as 'SEBI Act') read with Rule
3 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules, 1995 (hereinafter referred to as Adjudication Rules) vide communiqu
dated October 04, 2012, to inquire into and adjudge under Section 15 A (a) and 15 C of the
SEBI Act, the alleged violations by the Company.

Adjudication order against M/s Naina Semiconductor Ltd.

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Show Cause Notice, Reply and Personal Hearing:

3. A Show Cause Notice No. NRO/AO/VKV/SKG/130/2014 dated January 21, 2013
(hereinafter referred to as SCN) was served upon the Noticee through Postal Department
under Rule 4 (1) of the Adjudication Rules, to show cause as to why an inquiry be not held
against the Noticee and penalty be not imposed under section 15 A (a) and 15 C of the
SEBI Act, for the alleged violations of not obtaining of SCORES authentication and non
redressal of investor grievances. The allegations against the Noticee as leveled in the SCN,
are produced hereunder;
a. Vide letter dated May 30, 2013 and June 25, 2013, SEBI intimated the Noticee about the
pendency of complaints and also called upon the Noticee to redress the grievances of
investors. The Noticee was also informed that in case of failure to redress the investor
grievances within the stipulated time, the Noticee shall be liable for the violation of
Section 15C as well as 15 A (a) of SEBI Act, 1992.

b. In view of the above, it was alleged that despite being called upon to redress the
grievances the Noticee has failed to redress the investor grievances, within the time
specified by the Board resulting in violation of 15C of the SEBI Act.
Penalty for failure to furnish information, return, etc.
15A. If any person, who is required under this Act or any rules or regulations made
thereunder,
(a) to furnish any document, return or report to the Board, fails to furnish the same, he
shall be liable to a penalty of one lakh rupees for each day during which such failure
continues or one crore rupees, whichever is less;

Penalty for failure to redress investors grievances.

15C. If any listed company or any person who is registered as an intermediary, after
having been called upon by the Board in writing, to redress the grievances of investors,
fails to redress such grievances within the time specified by the Board, such company or
intermediary shall be liable to a penalty of one lakh rupees for each day during which
such failure continues or one crore rupees, whichever is less.
Adjudication order against M/s Naina Semiconductor Ltd.

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4. The Noticee vide its letter dated February 01, 2014 submitted the following :-

a.

They have forgotten/ lost their SCORES login-id and password. However, applied for
the same on December 17, 2013. The Noticee enclosed the copy of the application
form as a proof of application.

b.

The Noticee have replied to complainants vide letter dated December 22, 2011 and
June 20, 2011 respectively.

c.

The Noticee had requested to provide assistance in obtaining fresh SCORES login id
and password.

5. In the interest of natural justice and in order to conduct an eqnuiry in terms of Rule 4(3) of
the Rules, the Noticee was granted an opportunity of personal hearing on February 21,
2014 at SEBI, Northern Regional Office, New Delhi vide notice dated February 10, 2014.
Shri Anil Khanna, Director of the Noticee attended the hearing and reiterated the
submissions made in the reply to SCN.

CONSIDERATION OF ISSUES AND FINDINGS

6. I have taken into consideration the facts and circumstances of the case, material available
on record and oral submissions made during the hearing.

7. In respect to the allegation of non redressal of investor grievance, it is observed from the
records that as on January 05, 2015 there are 3 complaints pending. The Noticee has failed
to follow up on reset of SCORES login id / password and also failed to update the status of
complaints in SCORES database till date.

8. In view of the above and taking into account the available records, I am of the opinion that
the Noticee had failed to abide by the directives/ circulars issued by SEBI from time to
time and thereby failed to comply with the section 15 A (a) and 15 C of the SEBI Act.

Adjudication order against M/s Naina Semiconductor Ltd.

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9. For determining the quantum of penalty under Section 15 A (a) and Section 15 C of the
SEBI Act, the factors stipulated in section 15 J of the SEBI Act, have been taken into
consideration which are reproduced as under.

15J - Factors 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.

10.Taking into account the violation involved, status of subsequent compliance, the delay in
redressing grievances and relevant regulatory provisions for imposing penalties, I find
that a monetary penalty of Rs.1,00,000/- (Rupees One Lakh Only) under Section 15C of
SEBI Act would be commensurate.

Order
11. Therefore, in exercise of the powers conferred upon me under section 15-I of the
SEBI Act, 1992 read with Rule 5 of SEBI (Procedure for Holding Inquiry and imposing
penalties

by Adjudicating Officer) Rules, 1995, I hereby impose a penalty of

Rs.1,00,000/- (Rupees One Lakh only) under the provisions of Section 15 A (a) of the
SEBI Act and Section 15C of the SEBI Act, on the Noticee. I am of the view that the said
penalty would commensurate with the aforesaid failure committed by the Noticee.

Adjudication order against M/s Naina Semiconductor Ltd.

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12. 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 shall be forwarded to the Deputy
General Manager, Office of Investor Assistance and Education, Securities and Exchange
Board of India, Northern Regional

Office, 5th Floor, Bank of Baroda Building, 16,

Sansad Marg, New Delhi-110001

13. In terms of Rule 6 of the Adjudication Rules, copy of this order is being sent to the
Noticee and also to SEBI.

Date: January 07, 2014

Vijayant Kumar Verma

Place: New Delhi

Adjudicating Officer

Adjudication order against M/s Naina Semiconductor Ltd.

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