sebi:Order/BM/GN/2023-24/28341

SEBI · SEBI · 2022-12-19 · Barnali Mukherjee, Adjudicating Officer

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Facts / Headnote

Violations held established; total monetary penalty of Rs. 3,00,000 imposed on Noticee

Provisions invoked

• s. 15A
• s. 15
• s. 19
• s. 15H
• s. 15J
• s. 15F
• s. 28A

Regulations

• Reg. 7(2)(a)

Parties

• Mukund Kumar Jha

Holding

Noticee Mukund Kumar Jha, a Designated Person of Himadri Speciality Chemical Limited, violated Clause 6 of Schedule B, Regulation 7(2)(a) and Clause 10 of Schedule B of SEBI (PIT) Regulations and was held liable to monetary penalty under Section 15A(b) and Section 15HB of the SEBI Act, 1992 totalling Rs. 3,00,000.

Full text

Adjudication Order in the matter of Himadri Speciality Chemical Limited. Page 2 of 19 APPOINTMENT OF ADJUDICATING OFFICER

Adjudication Order in the matter of Himadri Speciality Chemical Limited. Page 3 of 19 c. Vide letter dated, July 12, 2022, submitted by HSCL, it was observed that all promoters / designated persons who traded during the period – 01-Jan-2020 till Jul-2022 had pre- cleared their trades, except for Noticee. d. As per the Code of Conduct framed by HSCL under the SEBI (PIT) Regulations, all Designated Persons, who intend to deal in the securities of the Company while the trading window is open, should pre-clear the transaction from the Compliance Officer where the no. of shares exceeds 10,000 (Ten thousand) or the aggregate value of trade exceeds Rs, 10 lakhs, in a calendar quarter. e. As per the details received from the exchanges, the trades of Noticee was observed to be in excess of the aforementioned thresholds and therefore the trades should have been undertaken after taking pre-clearance of the Compliance Officer. f. It was observed that Noticee traded shares during the month of December 2020, February 2021 and March 2021. g. In view of the above, it was alleged that Noticee by not complying with the requirement of pre-clearance by the compliance officer for executing trades has allegedly violated Clause 6 of the Schedule B of code of Conduct as prescribed under SEBI (PIT) Regulations. Alleged Non-Compliance of Regulation 7(2)(a) SEBI (PIT) Regulations by Noticee 1: h. As observed from the above paragraphs, Noticee, executed trades in the shares of HSCL during the month of D

Adjudication Order in the matter of Himadri Speciality Chemical Limited. Page 4 of 19 k. Since, Noticee did not make disclosure being the designated person of HSCL within two trading days in compliance of Regulation 7(2)(a) of SEBI (PIT) Regulations, it is alleged that Noticee has violated Regulation 7(2)(a) of SEBI (PIT) Regulations. Alleged Violation of Clause 10 of Schedule B of the Code of Conduct as prescribed under SEBI (PIT) Regulations by Noticee : l. It was observed that, Noticee being Designated Persons had undertaken contra-trades. Clause 10 of the Schedule B of the PIT Regulations states that, “The code of conduct shall specify the period, which in any event shall not be less than six months, within which a designated person who is permitted to trade shall not execute a contra trade. The compliance officer may be empowered to grant relaxation from strict application of such restriction for reasons to be recorded in writing provided that such relaxation does not violate these regulations. Should a contra trade be executed, inadvertently or otherwise, in violation of such a restriction, the profits from such trade shall be liable to be disgorged for remittance to the Board for credit to the Investor Protection and Education Fund administered by the Board under the Act.” m. The following trades appeared to be in the nature of contra-trades:– Name Details of trades Profit Mukund Kumar Jha Multiple instances of Contra Trade Date Buy Sell Buy Value Sell Value 11-Dec- 20

Source: SecMarx — sebi:Order/BM/GN/2023-24/28341. 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.