Courts Update Delhi HC directs BSE to clarify on plea...

Delhi HC directs BSE to clarify on plea on social media disinformation


New Delhi Sept 20(ILNS): The Delhi High Court directed Bombay Stock Exchange (BSE) to issue a clarification on its website, in order to make it clear to investors that is not liable for any action, in a plea filed by seeking directions, to frame a comprehensive policy, to stem the flow of false information on stocks on the social media platforms, also including, the manner in which the Stock Exchanges and Regulators ought to deal with intimations of solicitation, keeping in mind the impact on listed companies of such classifications on the stock exchange websites.

A single-judge bench comprised of Justice Rekha Palli issued notice to Central Government, Bombay Stock Exchange, Twitter, WhatsApp, Telegram, and 7 other respondents

The Court further directed, Twitter, WhatsApp and Telegram to block/remove the offending
material within 48 hours, subject to the petitioner providing them, with the URL.
Upon oral prayer of Advocate Hemant Shah appearing on behalf of the petitioner, the court
impleaded National Stock Exchange (NSE) and Security and Exchange Board of India (SEBI) as parties.

The plea further sought:

  1. Direction to stop Hanif Kashambhai Shekh from leaving the country .
  2. Direction to BSE to remove the name of the petitioner from its website’s from the category “For
    Information List” and “Information list”.
  3. Direction to Ministry of Information and Technology, Twitter, WhatsApp and
    Telegram, to forthwith block, take down and remove the offending material
    specified in (i) this petition and (ii) the complaints made to the police on 18.09.2021.
  4. Quash the actions of BSE, in merely uploading information on the on intimation from investors
    without conducting any pre-decisional hearing of the aggrieved company.
    The petition avers that, a malicious social media disinformation campaign has been running
    against it, with the intent of stock manipulation, it is being spread as a “Fraud Alert”,
  5. exhorting people to exit the stock on opening on Monday, further making allegations that
  6. the petitioner is now on the list of “Unsolicited SMS” purportedly on the NSE website.
  7. According to the petition, these allegations are evidently under a wide conspiracy to
  8. destabilize the stock, harm the Company, upon investigation, it may transpire that there is a larger force trying to extort money from the petitioner under these false campaigns and it is a clear attempt at deliberate damage to stock, and also stock manipulation and constitute fraudulent and unfair practices barred by the SEBI.

The petition with regards to BSE states, on the link there is an excel sheet, uploaded
under the heading “Information list – Scrips where SMSs were observed and liable for action as per various notices issued by the Exchange from time to time” where the name of the petitioner is appearing. The plea further states, BSE did not give any opportunity of hearing to the petitioner nor did not seek any clarification from it.

The petition has been filed and argued by Advocate Hemant Shah.

The petition is placed for a further hearing on September 17, 2021./ILNS/KR/SNG


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