sebi:WTM/MPB/IVD/ID-1/140/2020
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Facts / Headnote
Benefit of doubt given to Noticee No.1 to 4 on charge of trading on the basis of UPSI-1; Noticee No.1 and 2 held to have violated Part A, clause 3.3 of Schedule 1 Model Code under Regulation 12(1) of PIT Regulations, 1992 for incorrect pre-clearance undertakings dated October 12, 2010; disgorgement/loss-avoided with interest and monetary penalty under Section 15HB directed with escrow and defreezing conditions.
Provisions invoked
- s. 11
- s. 11(4)
- s. 19
- s. 11(1)
- s. 12A
- s. 12
- s. 15H
- s. 15G
- s. 15J
- s. 307
- s. 15
- s. 2(13)
Regulations
- Reg. 4
- Reg. 12(1)
- Reg. 3
- Reg. 199
- Reg. 3(i)
- Reg. 2(c)
- Reg. 2
- Reg. 2(e)
- Reg. 2(h)
- Reg. 2(k)
- Reg. 12
- Reg. 201
- Reg. 2(d)
- Reg. 12(2)
- Reg. 2(i)
Parties
- Kirloskar Brothers Ltd. Employees Welfare Trust Scheme (through trustee Sanjay Kirloskar)
- Pratima Sanjay Kirloskar
- Prakar Investments Pvt. Ltd.
- Karad Projects and Motors Ltd. (formerly Hematic Motors Pvt. Ltd.)
Holding
Trades dated October 14, 2010 were held not proved on preponderance to be on the basis of UPSI-1 regarding KCEL capital loss, but Noticee No.1 and 2 submitted incorrect no-UPSI declarations for pre-clearance and thereby violated the Model Code under Regulation 12(1) of PIT Regulations, 1992, attracting penalty and disgorgement-related directions.
Full text
Order in respect of Sanjay Kirloskar and Others in the matter of Kirloskar Brothers Limited Page 2 of 57 2. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) received various complaints alleging insider trading and bad corporate governance practices in KBL. Pursuant to the receipt of complaints, SEBI conducted investigation during the period from March 1, 2010 to April 30, 2011 (hereinafter referred as “investigation period”) into the matter relating to dealings in the scrip of KBL to ascertain possible violation of the provisions of SEBI Act, 1992, SEBI (Prohibition Insider Trading) Regulations, 1992 (hereinafter referred to as “PIT Regulations, 1992”) and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).
Order in respect of Sanjay Kirloskar and Others in the matter of Kirloskar Brothers Limited Page 3 of 57 with Regulation 2(ha) of PIT Regulations, 1992 read with Regulation 12 of SEBI (Prohibition Insider Trading) Regulations, 2015 (hereinafter referred to as “PIT Regulations, 2015”) for trading in the shares of KBL while in possession of UPSI by Noticee No. 1 to 4; 4.2. appropriate penalty be not levied against Noticee No. 1, and 2 under sections 11B(2) read with 15HB and 11(4A) of SEBI Act, 1992 read with Rule 4(1) of AO Rules for the alleged violation of Part A, of clause 3.3 of Schedule 1 i.e. Model Code of Conduct for Prevention of Insider Trading, specified in Regulation 12(1) of SEBI PIT Regulations 1992 by Noticee No. 1 and 2.
Order in respect of Sanjay Kirloskar and Others in the matter of Kirloskar Brothers Limited Page 4 of 57 Table No. 2: Yearly results
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Source: SecMarx — sebi:WTM/MPB/IVD/ID-1/140/2020. 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.