sebi:Order/PM/AN/2021-22/13087

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

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Facts / Headnote

Penalty imposed on the Noticee for violation of insider trading regulations and Model Code of Conduct

Provisions invoked

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

Regulations

• Reg. 12(1)
• Reg. 3
• Reg. 3(i)
• Reg. 2(e)
• Reg. 12
• Reg. 201
• Reg. 12A

Parties

• Palred Technologies Ltd. Noticee (Non-Executive Independent Director)

Holding

The Noticee, a Non-Executive Independent Director of Palred Technologies Ltd., was found guilty of violating Regulation 3(i) and 3(ii) of PIT Regulations, 1992 and Section 12A(d) and 12A(e) of the SEBI Act, 1992 read with Regulation 12 of PIT Regulations, 2015 by purchasing 600 shares during the UPSI-II period, and of violating Clause 3.2.2 of Schedule I, Part A of Model Code of Conduct by trading during the window closure period. A penalty of Rs. 6,00,000/- was imposed under Sections 15G and 15HB of the SEBI Act, 1992.

Full text

Adjudication Order in the matter of Palred Technologies Ltd. Page 2 of 16 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 16 1992 and Sections 12A(d) and 12A(e) of the SEBI Act, 1992 read with Regulation 12 of SEBI (Prohibition of Insider Trading) Regulations, 2015 (hereinafter referred to as "PIT Regulations 2015") and in terms of Section 15HB of SEBI Act for the alleged violation by the Noticee, of Clause 3.2.2 of Part A of Schedule I of Model Code of Conduct for prohibition of insider trading for listed companies under Regulation 12(1) of PIT Regulations, 1992 read with Regulation 12 of PIT Regulations, 2015. Thereafter, 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 16 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 Non-Executive Independent Director of the Company from June 19, 2009 till August 14, 2015 (as per the 2013-14 Annual Report of the Company and BSE website) and was having professional relationship with Palem S. Reddy as a director in the Company and purchased the shares for investment. As a member of the Board, he was in possession of unpublished price sensitive information relating to slump sale and dividend pay-out. It was further alleged that during the UPSI-II period, he purchased 9300 shares of the Company valuing Rs. 2.73 lacs. As per depository data available on October 18, 2013, he was holding 9800 shares of PTL and he received dividend of Rs.2.84 lacs with respect to his holding. In terms of Regulation 2(e) of PIT Regulations, 1992, the Noticee was an "insider" since he was a director of the Company and he had traded during UPSI-II period while he was in possession of unpublished price sensitive information thereby violated the provisions of Regulation 3(i) and 3(ii) of SEBI PIT

Source: SecMarx — sebi:Order/PM/AN/2021-22/13087. 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.