sebi:Order/GR/KG/2020-21/9400

SEBI · SEBI · 2019-02-20 · 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

Exonerated - not held liable for insider trading; no penalty imposed

Provisions invoked

• s. 15
• s. 12A
• s. 12
• s. 15I
• s. 15G
• s. 15J
• s. 2(1)

Regulations

• Reg. 3
• Reg. 5
• Reg. 4(1)
• Reg. 4
• Reg. 2
• Reg. 201
• Reg. 30(1)
• Reg. 30
• Reg. 2(1)(d)(i)
• Reg. 33
• Reg. 2(1)(n)
• Reg. 2(1)(g)(i)
• Reg. 4(2)

Parties

• Shri Kalia Subhash Chandra

Holding

The Noticee, though a director and Audit Committee/Risk Monitoring Committee member, was not established to have traded while in possession of UPSI when he bought 1000 shares of Yes Bank Limited on February 8, 2019, and therefore did not violate Regulation 4(1) of the PIT Regulations read with Section 12A(d) and (e) of the SEBI Act, 1992.

Full text

Adjudication Order in respect of Shri Kalia Subhash Chandra in the matter of Yes Bank Limited Page 2 of 32 2. Subsequently there was sudden spurt in the share price of YBL on February 14, 2019, from the previous close price of Rs. 169.45 to intra-day high of Rs. 224, i.e., a rise of 32.19%, before closing at Rs. 221.25. The trading volume in the scrip had also seen around 635% (on February 14, 2019), spurt compared to previous day’s trading volume on the BSE. Based on these events, SEBI had suo-motu initiated the case for the aforesaid events of February 14, 2019 in the scrip of YBL. Accordingly, it was prima facie observed that the aforesaid press release made to the stock exchanges, containing the aforesaid announcement made by YBL, might have influenced the price of the YBL and the analysis of SEBI, prima facie suggested the possibility of trading by certain entities based on unpublished price sensitive information (“UPSI”).

Adjudication Order in respect of Shri Kalia Subhash Chandra in the matter of Yes Bank Limited Page 3 of 32 by YBL was also received on February 13, 2019 vide letter dated February 12, 2019 by YBL from RBI. The said information was disseminated to the stock exchange on February 13, 2019 as it was considered as unpublished price sensitive information (“UPSI”). Thus, as per Regulation 2(1)(n)(vi) of SEBI (PIT) Regulations, 2015, February 05, 2019, has been

Adjudication Order in respect of Shri Kalia Subhash Chandra in the matter of Yes Bank Limited Page 4 of 32 6. Investigation further revealed that since, the Noticee was a director of YBL and also a member of its Audit Committee and Risk Monitoring Committee, during the period of UPSI. Therefore, he was a “connected person” who is reasonably expected to have access to UPSI in terms of Regulation 2(1)(d)(i) of SEBI (PIT) Reg., 2015 and hence was an insider in terms of the Regulations 2(1)(g)(i) of SEBI (PIT) Reg., 2015. As already mentioned above the Noticee, had traded in the scrip of YBL during the UPSI period. It was alleged that the Noticee, being an “insider” had bought 1000 (one thousand) shares of YBL on February 8, 2019, during the period of the UPSI.

Source: SecMarx — sebi:Order/GR/KG/2020-21/9400. 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.