sebi:AK/AO-167/2013
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Facts / Headnote
Penalty of Rs. 2,00,000 imposed on the Noticee for violation of Regulation 13(4) read with 13(5) of the PIT Regulations
Provisions invoked
- s. 15A
- s. 15
- s. 15J
Regulations
- Reg. 13
- Reg. 199
- Reg. 13(4)
Parties
- Shri Sunil Gokhale
Holding
The Noticee, an officer of a listed company, violated Regulation 13(4) read with 13(5) of the PIT Regulations on four occasions by failing to disclose change in shareholding exceeding Rs. 5 lakh following the sale of 4,702 shares between 30.07.2012 to 03.08.2012. A penalty of Rs. 2,00,000 was imposed under Section 15A(b) of the SEBI Act.
Full text
Page 2 of 10 stock Exchanges of the change in shareholding exceeding the prescribed limit within two days. 2. Analysis was conducted by SEBI with regard to the trading activities in the scrip of the company from 01.06.2012 to 31.08.2012. It was observed that the Noticee, who was the employee in the company till 04.08.2012 as per the company’s aforesaid letter, had sold 4702 shares between 30.07.2012 to 03.08.2012 resulting in the Noticee shareholding exceeding Rs. 5 lacs in value since the last disclosure. The shares of the company were listed at Bombay Stock Exchange (hereinafter referred to as ‘BSE’) and National Stock Exchange (hereinafter referred to as ‘NSE’).
Page 3 of 10 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 6. A Show Cause Notice (hereinafter referred to as “SCN”) Ref. No. EAD/BM/VRP/10502/2013 dated 03.05.2013 was issued to the Noticee under rule 4(1) of SEBI Rules communicating the alleged violation of PIT Regulations as detailed below. Date of sale of shares Qty Sold at BSE Qty Sold at NSE Total Qty Sold at BSE & NSE Average sell price at BSE Rs. Average sell price at NSE Rs. Total sale value Rs. Remarks 30.07.12 Nil 1300 1300 N.A. 1045.19 13,58,747 Change exceeding Rs. 5 lacs in value 31.07.12 102 200 302 1043.92 1040.40 3,14,559.84 Change exceeding Rs. 5 lacs in value 01.08.12 300 400 700 1041.67 1042.05 7,29,321 02.08.12 326 1174 1500 1043.35 1044.64 15,66,539.46 Change exceeding Rs. 5 lacs in value 03.08.12 150 750 900 1042 1042.86 9,38,445 Change exceeding Rs. 5 laics in value
Page 4 of 10 8. The Noticee vide reply dated 12.05.2013 to the SCN has submitted that he had to take the difficult decision to leave the organization due to health reasons. The Noticee has further inter alia stated that there was an inadvertent contravention of the code of conduct for prevention of insider trading of the company from his side during the last 6 days of his tenure at the organization, and, that he had submitted an apology letter to the compliance officer of the company, once the same was brought to his notice. The Noticee has further inter alia stated that at the time of sale of the said securities, he was not privy to any price sensitive information, as his replacement was in place in April 2012, and, he had handed over all his responsibilities to him long before. The Noticee has inter alia further also submitted that he had exercised 9,401 options vested in him during the short window, thus, costing approximately Rs. 68 laics and had taken loan against shares from HDFC Bank and Axis Bank for about Rs. 53.50 lacs, hence, the entire sale of 4,702 shares for about Rs. 49.10 lacs was done with a single point agenda to repay all the loans before stepping out of employment.
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Source: SecMarx — sebi:AK/AO-167/2013. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.