sebi:Order/PM/AN/2021-22/12749

SEBI · SEBI · 2016-06-02 · Prasanta Mahapatra, Adjudicating Officer

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Facts / Headnote

Penalty imposed on the Noticee for insider trading violation

Provisions invoked

• s. 11B
• s. 11
• s. 15
• s. 11(1)
• s. 12A
• s. 15G
• s. 15J

Regulations

• Reg. 3
• Reg. 3(i)
• Reg. 2(e)
• Reg. 12
• Reg. 201
• Reg. 12A
• Reg. 12A(d)

Parties

• Karna Ramanjula Reddy

Holding

The Noticee, an employee of Palred Technologies Ltd. in the Finance Department, violated Regulation 3(i) and 3(ii) of PIT Regulations, 1992 and Section 12A(d) and 12A(e) of the SEBI Act read with Regulation 12 of PIT Regulations, 2015 by trading in PTL shares while in possession of Unpublished Price Sensitive Information. A penalty of Rs. 2,00,000/- was imposed under Section 15G of the SEBI Act.

Full text

Adjudication Order in the matter of Palred Technologies Ltd. Page 2 of 18 Directors 01-Sep-2012 to 31-Mar-2014 Name Designation Date of Joining Date of Cessation Palem S. Reddy Chairman & Managing Director 24.12.1999 NA A. Mohan Krishna Reddy Non-Executive Independent Director 19.06.2009 NA T.R.Sivarama Krishnan Non-Executive Independent Director 06.02.2009 NA Edara Srinivas Prasad Non-Executive Independent Director 19.03.2009 NA Prof.Janat Shah Non-Executive Independent Director 12.11.2010 01.10.2013 K.V.Ramakrishna Nominee Director 11.10.2005 30.09.2013 P Soujanya Reddy Non-Executive Director 09.08.2011 13.10.2013 A.Sridhar Company Secretary and Compliance Officer 10.08.2012 09.03.2013 M. Raghuram 09.03.2013 NA

Adjudication Order in the matter of Palred Technologies Ltd. Page 3 of 18 APPOINTMENT OF ADJUDICATING OFFICER 4. Pursuant to the investigation, Shri Nagendra Parekh was appointed as Adjudicating Officer (hereinafter referred to as “AO”) SEBI Act read with Rule 3 of the SEBI (Procedure of Holding Inquire and Imposing Penalties by Adjudicating Officer) Rules, 1995, vide order dated June 02, 2016, to inquire into and adjudge against Karna Ramanjula Reddy (hereinafter referred to as “Noticee”), in terms of Section 15G of SEBI Act, for the alleged violation of Regulation 3(i) and 3(ii) of PIT Regulations, 1992 and Sections 12A(d) and 12A(e) of the SEBI Act read with Regulation 12 of SEBI (Prohibition of Insider Trading) Regulations, 2015 (hereinafter referred to as "PIT Regulations 2015") by the Noticee. Subsequently, the matter of conducting Adjudication Proceedings in the matter of PTL was assigned to the undersigned and the undersigned was appointed as AO vide Order dated May 18, 2017. The appointment of the undersigned as AO was communicated vide communique dated August 02, 2017.

Adjudication Order in the matter of Palred Technologies Ltd. Page 4 of 18 sale of the business was announced by the Company on August 10, 2013. Therefore, the period of UPSI-I was considered to be September 18, 2012 to August 10, 2013 and the Company informed that the trading window closure period was from August 08, 2013 to August 13, 2103. Similarly, UPSI-II came into existence on September 12, 2013 (the day when decision to refund by capital reduction was first initiated) and continued till October 14, 2013 (the day when the Company informed BSE that the BoD at their meeting held on October 13, 2013 had approved the dividend of Rs. 29/- per share and reduction of capital to the extent of 50% of paid up capital by paying Rs. 29/- per share). Therefore, the UPSI-II period was September 12, 2013 to October 14, 2013 and the Company informed that the trading window closure period was from October 10, 2013 to October 15, 2013. The SCN alleged that the Noticee was an employee of the Company and was working in Finance Department as an Assistant Manager during the period of UPSI. His annual income was in the range of Rs. 1 lac to Rs.5 lacs. He bought shares of the Company during UPSI-I and post announcement of PSI-II. He did not transact in any other scrip since April 2011 except in the shares of the Company and that too during the UPSI period. The Noticee had submitted that he had invested in shares of the Company as it was trading in 52 week low price and had expected to get good

Source: SecMarx — sebi:Order/PM/AN/2021-22/12749. 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.