sebi:RA/DPS/223/2017

SEBI · SEBI · 2016-03-04 · Rachna Anand, Adjudicating Officer

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Facts / Headnote

No penalty imposed; show cause notice disposed of

Provisions invoked

• s. 15A
• s. 15I
• s. 15J
• s. 12
• s. 15F
• s. 4A

Regulations

• Reg. 12(1)
• Reg. 12

Parties

• Shri Nirav Shah

Holding

The Adjudicating Officer held that no penalty is warranted to be imposed upon the Noticee for violating Clause 4.2 of the Model Code of Conduct, as the company (Tata Communications Ltd) had already imposed a commensurate penalty of ₹121,155 and issued a cautionary warning for the same violation.

Full text

Adjudication Order in respect of Shri Nirav Shah Page 2 of 14 APPOINTMENT OF ADJUDICATING OFFICER 2. SEBI initiated adjudication proceedings and appointed the undersigned as Adjudicating Officer under section 15I of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act') read with rule 3 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) vide order dated March 4, 2016, to inquire into and adjudge under section 15A(b) of the SEBI Act, the violations of Clause 4.2 of the Model Code of Conduct for prevention of Insider Trading for Listed companies in terms of Schedule I under Regulation 12(1) of PIT Regulations. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

Adjudication Order in respect of Shri Nirav Shah Page 3 of 14 Senior Manager, Corporate Strategy. It is observed that Noticee as on year ending March 2010 held 3,000 TCL ADRs (equivalent to 6,000 shares). Further, Noticee has traded in ADRs of the company on certain occasions and also have entered into opposite transactions of ADRs within 6 months on two occasions, which is not in conformity with Clause 4.2 of the Model Code of Conduct for prevention of Insider Trading for Listed companies in terms of Schedule I under Regulation 12(1) of PIT Regulations. The details of transactions are given below:- Sr. No. Date No of ADRs Equivalent No. of Shares Type of Transaction 1 Febuary 1, 2010 900 1800 Sold 2 Febuary 4, 2010 1000 2000 Bought 3 April 29, 2010 1000 2000 Bought 4 May 7, 2010 1000 2000 Bought 5 July 23, 2010 1000 2000 Sold 6 October 12, 2012 182 364 Sold 7 June 27, 2013 423 846 Sold 8 August 2, 2013 1500 3000 Sold 9 September 6, 2013 1895 3790 Sold

Adjudication Order in respect of Shri Nirav Shah Page 4 of 14 (e) the professional firms such as auditors, accountancy firms, law firms, analysts, consultants, etc., assisting or advising listed companies, shall frame a code of internal procedures and conduct as near thereto the Model Code specified in Schedule I of these Regulations without diluting it in any manner and ensure compliance of the same. (2) The entities mentioned in sub-regulation (1), shall abide by the code of Corporate Disclosure Practices as specified in Schedule II of these Regulations. (3) All entities mentioned in sub-regulation (1), shall adopt appropriate mechanisms and procedures to enforce the codes specified under sub-regulations (1) and (2). (4) Action taken by the entities mentioned in sub-regulation (1) against any person for violation of the code under sub-regulation (3) shall not preclude the Board from initiating proceedings for violation of these Regulations. SCHEDULE 1 [Under regulation 12(1)] PART A MODEL CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING FOR LISTED COMPANIES 4.2 All directors/ officers/ designated employees who buy or sell any number of shares of the company shall not enter into an opposite transaction i.e. sell or buy any number of shares during the next six months following the prior transaction. All directors/ officers/ designated employees shall also not take positions in derivative transactions in the shares of the company at any time.

Source: SecMarx — sebi:RA/DPS/223/2017. 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.