sebi:Order/KS/VC/2019-20/5497-5498
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Facts / Headnote
No penalty imposed; allegations of insider trading and Model Code of Conduct violation not established
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15G
- s. 15J
- s. 307
- s. 12
- s. 4A
- s. 307o
- s. 2(60)
- s. 118(10)
Regulations
- Reg. 12(1)
- Reg. 3
- Reg. 199
- Reg. 3(i)
- Reg. 2
- Reg. 2(c)
- Reg. 2(e)
- Reg. 4(1)
- Reg. 201
- Reg. 2(h)
- Reg. 12(2)
- Reg. 45
- Reg. 2(i)
- Reg. 3B(1)
- Reg. 50
Parties
- Chetan S Kothari
- Chetna Kothari
Holding
The Adjudicating Officer held that the Noticees were 'insiders' under PIT Regulations but that the alleged violations of Regulation 3(i) of PIT Regulations and clauses 3.2-2 & 3.2-5 of the Model Code of Conduct were not established on record, and therefore imposed no penalty under Sections 15G and 15HB of the SEBI Act.
Full text
Page 2 of 32 pursuant to which an Adjudication Order dated February 22, 2018 (hereinafter referred to as ‘AO Order’) was passed by the erstwhile Adjudicating Officer (AO) in the said matter. By the said AO order, the Noticees were held liable for the violation of Regulation 3(i) of PIT Regulations and a penalty of Rs. 15,00,000/- (Rs. Fifteen Lakhs only) was imposed on each of them. Further, the Noticee 1 was also found to have violated the provisions of Clauses 3.2-2 and 3.2-5 of Model Code of Conduct contained in Part A of Schedule I under Regulation 12(1) of PIT Regulations and a separate penalty of Rs. 8,00,000/- (Rs. Eight Lakhs only) was imposed on him. Thus, a total penalty of Rs. 38,00,000/- (Rs. Thirty Eight Lakhs only) was imposed on the Noticees.
Page 3 of 32 APPOINTMENT OF ADJUDICATING OFFICER 4. In light of the abovementioned SAT Order, vide order dated October 01, 2019, the undersigned was appointed as the AO under Section 19 read with Section 15-I(1) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act') read with Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) by SEBI in the matter for the first time to decide the matter afresh under Section 15G and 15HB of the SEBI Act. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING:
Page 4 of 32 Sr. No. Nature of events Time Date Persons Involved 1 Preparation of Financial Results From end of June Qtr till the date of Meeting Directors 2 Dispatch of Notice of Board Meeting (regarding declaration/discussion of financial results of company for the quarter ending June 2012) to all concerned persons
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