sebi:AO/BS/03/2009

SEBI · SEBI · 2009-02-12 · Biju. S, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Guilty of insider trading; penalty imposed of Rs.5,00,000/- each on Shri. Dilip Pendse, Smt Anuradha Pendse and Nalini Properties (P) Limited

Provisions invoked

• s. 15
• s. 15G
• s. 15J
• s. 307

Regulations

• Reg. 3
• Reg. 2
• Reg. 2(c)
• Reg. 2(e)
• Reg. 2(k)

Parties

• Shri Dilip Pendse
• Smt Anuradha Pendse
• Nalini Properties (P) Limited

Holding

The noticees, including Shri Dilip Pendse, Smt Anuradha Pendse and Nalini Properties (P) Limited, were found to have violated Regulation 3 of the Insider Trading Regulations by dealing in shares of Tata Finance Ltd on the basis of unpublished price sensitive information. A penalty of Rs.5,00,000/- was imposed on each noticee.

Full text

2 investigation conducted by SEBI was also forwarded to the noticees alongwith the said show cause notice. 4. As stated before, the allegation is that the notices induldged in insider trading in the shares of TFL on the basis of unpublished price sensitive information. The price sensitive information was pertaining to the loss of Rs.79.37 crores suffered by Nishkalp Investment and Trading Co Ltd, (hereinafter referred to as “Nishkalp” ) a wholly owned subsidiary of TFL. This information was made public only on 30th April 2001. Shri Dilip Pendse, besides being MD of TFL was also the Director of Nishkap at the relevant time. It is alleged that Shri. Pendse was aware of the poor financial position of TFL on account of the losses incurred by Nishkap before the information was made public on 30.04.2001. It is further alleged that on the basis of the said unpublished price sensitive information provided by Shri. Dilip Pendse, 40,000 shares of TFL were sold by Smt. Anuradha Pendse and Nalini Properties on March 28, 2001 and March 30, 2001. It is alleged that on account of the sale, unjust profit accrued to the entites. The details of shares sold by the Smt. Anuradha Pendse and Nalini Properties Limited are as under:

3 REPLY 6. The representatives of the noticees M/s Bhave & Company, Advocates, vide their letter dated February 12, 2009 sought inspection of certain documents. The said request was acceded to and the noticees were grated an opportunity to inspect the documents on February 20, 2009. Subsequently, Bhave & Company, Advocates, vide letter dated February 19, 2009 requested for postponing the date of inspection as its client, Pendse Family is busy with a family function. Allowing the request made on behalf of the noticees, noticees were advised to inspect the documents on March 04, 2009. Shri Pendse inspected the documents on behalf of all the noticees on March 04, 2009.

4 reported to the Exchanges itself is incorrect and wrong. As BSE was informed of the transaction as far as back on 19th September, 2000, this fact itself answers the case made against the noticees. The noticees stated that Smt. Anuradha Pendse and Nalini Properties (P) Ltd. sold 10,000 and 30,000 shares of TFL respectively to ‘MSSPL’ on principal to principal basis on September 11, 2000. In this regard, contract note in Form B was issued for the said transaction and the Ledger account of Smt Anuradha Pendse and Nalini Properties (P) Ltd were respectively credited with the said amounts on September 16, 2000. The noticees denied that deliveries and/or payments in respect of the transactions stated hereinabove took place during March 28, 2001 to March 31, 2001. They have also denied the allegation that the payments for the purchases made by MSSPL were made only on March 30, 2001 and March 31, 2001.

Source: SecMarx — sebi:AO/BS/03/2009. 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.