sebi:Order/GR/KG/2020-21/8743

SEBI · SEBI · 2011-01-07 · G Ramar, 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

Noticee held guilty of trading in SCSL shares while in possession of UPSI; violation of insider trading provisions established, penalty stage discussed under Section 15G

Provisions invoked

• s. 15
• s. 12A
• s. 12
• s. 15H
• s. 15G
• s. 15J
• s. 15F
• s. 28A

Regulations

• Reg. 9
• Reg. 2
• Reg. 3
• Reg. 3(i)
• Reg. 2(c)
• Reg. 2(e)
• Reg. 2(k)
• Reg. 201

Parties

• TAN Murti

Holding

The Noticee TAN Murti, an employee of Satyam Computer Services Ltd., sold 14500 shares on December 15, 2008 while in possession of UPSI about the proposed acquisition of Maytas Infra Ltd. and Maytas Properties Ltd., and was therefore guilty of insider trading.

Full text

Adjudication Order in the matter of Satyam Computer Services Ltd. Page 2 of 44 FACTS OF THE CASE IN BRIEF 2. Securities and Exchange Board of India (SEBI) had conducted investigation pertaining to issues relating to insider trading in the scrip of Satyam Computer Services Ltd., (hereinafter referred to as “SCSL/ Satyam”) during the financial year 2008-09 (hereinafter referred to as “investigation period”). The investigation revealed that SCSL’s announcement on December 16, 2008 to acquire Maytas Infra Ltd., (hereinafter referred to as “MIL”) and Maytas Properties Ltd., (hereinafter referred to as “MPL”), and the subsequent withdrawal of the said proposal on December 17, 2008 and the confession made by Mr. B Ramalinga Raju, the then Chairman of SCSL on January 07, 2009 were price sensitive information. It was also observed that certain employees and clients had sold SCSL shares between November 25, 2008 and December 16, 2008 till before the announcement and some 80 clients sold shares before January 07, 2009. The trading window was closed from December 17, 2008 and stayed closed till June 12, 2009. On December 17, 2008 the price of the scrip fell to a low of Rs. 151 i.e. 33.5% fall from previous close price, but, after the cancellation of

Adjudication Order in the matter of Satyam Computer Services Ltd. Page 3 of 44 APPOINTMENT OF ADJUDICATING OFFIER 5. SEBI vide Orders dated January 07, 2011 and April 08, 2011 had appointed Mr. Piyoosh Gupta, General Manager, SEBI as the Adjudicating Officer under Section 15-I of SEBI Act read with Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘SEBI Rules’) to inquire into and adjudge under Section 15G of SEBI Act. Subsequent to the order of the Hon’ble SAT remanding the matter, Ms. Anita Kenkare was appointed as the Adjudicating Officer on April 28, 2014. Thereafter on her transfer the undersigned was appointed as AO vide order of the competent authority dated August 14, 2019 (conveyed vide communique dated October 23, 2019).

Adjudication Order in the matter of Satyam Computer Services Ltd. Page 4 of 44 settling the proceedings. Thereafter, SEBI vide communication dated September 04, 2012 informed that the consent application filed by Noticee had been rejected. Vide e-mail dated September 27, 2012, the Noticeealso intimated that the consent application filed by him had been rejected by SEBI and sought time till October 25, 2012 for filing reply. Vide notice dated October 05, 2012, the request of the Noticee for extension of time was acceded to partially and the Noticee was advised to file the reply on or before personal hearing scheduled for October 19, 2012. The Noticee’s representative, vide letter dated October 15, 2012 sought time for filing reply till October 25, 2012 and also requested for rescheduling the personal hearing fixed for October 19, 2012. The Noticee was then advised to appear for hearing on November 05, 2012. The Noticee submitted detailed reply vide letter dated October 31, 2012 and appeared for hearing on November 05, 2012. During the hearing, while reiterating the

Source: SecMarx — sebi:Order/GR/KG/2020-21/8743. 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.