sebi:Order/PM/SM/2021-22/11380

SEBI · SEBI · 2020-05-05 · Prasanta Mahapatra, Adjudicating Officer

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Facts / Headnote

Show Cause Notice disposed of; no violation found against either Noticee; no penalty imposed

Provisions invoked

• s. 15A
• s. 15
• s. 19

Regulations

• Reg. 7
• Reg. 6
• Reg. 6(2)
• Reg. 7(2)
• Reg. 7(2)(a)
• Reg. 7(2)(b)
• Reg. 9(3)
• Reg. 6(4)
• Reg. 7(4)

Parties

• ITC Limited
• Rajendra Kumar Singhi

Holding

The Adjudicating Officer held that ITC Limited did not violate Regulation 7(2)(b) of the PIT Regulations merely by being in possession of BENPOS data, and that the Compliance Officer (Noticee 2) did not violate Regulation 7(2)(b) read with Regulation 9(3) as no obligation existed on the Company to be delegated to him.

Full text

Adjudication order in respect of ITC Limited and Rajendra Kumar Singhi in the matter of ITC Limited Page 2 of 30 2. In view of the said letter, SEBI conducted investigation in the scrip of ITC from April 01, 2018 to December 31, 2018 (hereinafter referred to as ‘Investigation Period’) to ascertain whether there was any disclosure violation of PIT Regulations by the Noticee. During the investigation, it was observed by SEBI that ITC had allotted Employee Stock Options to Victor. Pursuant to the above, Victor had exercised his options and he was allotted 15,970 shares by ITC on September 24, 2018. Subsequently, Victor sold the aforesaid 15,970 shares on October 01, 2018.

Adjudication order in respect of ITC Limited and Rajendra Kumar Singhi in the matter of ITC Limited Page 3 of 30 APPOINTMENT OF ADJUDICATING OFFICER

Adjudication order in respect of ITC Limited and Rajendra Kumar Singhi in the matter of ITC Limited Page 4 of 30 ‘Investigation Period’) to ascertain whether there was any disclosure violation of Securities and Exchange Board of India Act, 1992 and PIT Regulations by Victor. During the investigation, it was observed by SEBI that Victor was allotted Employee Stock Options by ITC. Pursuant to which, Victor had exercised his options and he was allotted 15,970 shares by ITC on September 24, 2018. Subsequently, Victor sold the aforesaid 15,970 shares on October 01, 2018. c. In this regard, it is observed from the details of trades of Victor that the following trade had taken place from his account in the cash segment during the Investigation Period: Table 1: Details of transactions of Victor in Cash Segment Sr. No Transaction Date Nature of Transaction No. of Shares Value (Rs) 1 October 01, 2018 Sale 15,970 47,51,560 In this regard, it is observed that Victor, by way of Email dated December 12, 2019 has confirmed the abovementioned transaction. Further, it is noted that Victor had disclosed about the abovementioned transaction on December 21, 2018 after a delay of 78 days. d. It is observed that, as per Regulation 7(2)(b) of PIT Regulations, a company is required to file the disclosure within two trading days from ‘becoming aware of information’ for which a disclosure is required to be filed under Regulation 7(2)(a) of PIT Regulations. e. In this regard, it is observed from the le

Source: SecMarx — sebi:Order/PM/SM/2021-22/11380. 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.