Description
SEBI order under sections 11(1), 11(4), 11(4A), 11B(1), 11B(2) read with sections 15HA and 15HB against Setco Automotive Limited and 9 other noticees for alleged fraudulent and unfair trade practices.
Summary
SEBI has issued an order under sections 11(1), 11(4), 11(4A), 11B(1), 11B(2) read with sections 15HA and 15HB of the SEBI Act, 1992 in the matter of Setco Automotive Limited. The order involves 10 noticees including Setco Automotive Ltd., Setco Auto Systems Pvt. Ltd., and 8 individuals (Harish Sheth, Udit Harish Sheth, Arun Arora, Ashok Kumar Jha, Suhasini Somesh Sathe, Rovinder Kumar Singla, Urja Harshal Shah, and Jatinder Bir Singh Gujral) for alleged violations relating to fraudulent and unfair trade practices in securities markets.
Key Points
- Order issued against Setco Automotive Limited and 9 other entities/individuals
- Proceedings initiated under multiple sections of SEBI Act including enforcement and investigation provisions
- Case involves voluminous records including a 40-page show cause notice with 26 annexures and 3 CDs of documents
- SEBI exercising its regulatory powers to prohibit fraudulent and unfair trade practices as mandated under section 11(2)(e) of SEBI Act
- Order references Supreme Court observation on SEBI’s wide-ranging legislative, executive and judicial powers
- The proceedings examine scope of ‘fraud’, ‘fraudulent’, ‘unfair’ and ‘manipulative’ practices under section 12A of SEBI Act
Regulatory Changes
No new regulatory changes introduced. This is an enforcement action under existing SEBI Act provisions.
Compliance Requirements
Specific compliance requirements and directions to the noticees would be detailed in the complete order. The document provided appears to be the prefatory section establishing SEBI’s jurisdiction and the legal framework for the proceedings.
Important Dates
- Order reference: QJA/SS/CFID/CFID-SEC2/32034/2025-26
- Order date: February 2026 (specific date to be confirmed from complete document)
Impact Assessment
Market Impact: High - Enforcement action against a listed automotive company (Setco Automotive Limited) involving the company, its subsidiary, and key individuals suggests serious corporate governance and regulatory compliance issues that could affect investor confidence and stock price.
Operational Impact: The involvement of multiple individuals including what appear to be promoters/key management personnel could impact the company’s operations and governance structure depending on the final directions in the order.
Investor Impact: Significant for investors in Setco Automotive Limited as the enforcement action indicates potential violations of securities laws that could have material financial and reputational consequences for the company.
Impact Justification
SEBI enforcement order against a listed company and 9 individuals/entities under multiple sections of SEBI Act for alleged fraudulent and unfair trade practices, indicating serious regulatory violations with potential market impact.