sebi:WTM/MPB/IVD/ID1/139/2020
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Facts / Headnote
Penalties and disgorgement imposed on Noticees for insider trading and fraud on minority shareholders of Kirloskar Industries Limited (KIL); no penalty on deceased Noticee No. 6 but disgorgement continued against legal representatives.
Provisions invoked
- s. 11B
- s. 11
- s. 11(4)
- s. 15
- s. 19
- s. 11(1)
- s. 12A
- s. 300
- s. 15H
- s. 372A
- s. 15G
- s. 15J
- s. 307
- s. 11C
- s. 28B
- s. 32
- s. 2(13)
- s. 11B(2)
- s. 11B(1)
- s. 28B(2)
Regulations
- Reg. 3
- Reg. 12(1)
- Reg. 2(1)(c)
- Reg. 199
- Reg. 13(3)
- Reg. 2(c)
- Reg. 3(i)
- Reg. 2
- Reg. 2(e)
- Reg. 11
- Reg. 2(h)
- Reg. 2(k)
- Reg. 12
- Reg. 201
- Reg. 3(3)
- Reg. 2(d)
- Reg. 12(2)
- Reg. 2(i)
- Reg. 3(1)(e)(i)
Holding
The Adjudicating Officer held that Noticees No. 1 to 6 and No. 9 traded in KBL shares while in possession of unpublished price sensitive information (UPSI-1: capital loss on KCEL advances; UPSI-2: quarterly financial results), and that Noticees No. 5, 7, 8 and 9 aided Noticees No. 1 to 6 in inducing KIL to purchase KBL shares, thereby committing fraud on KIL's minority shareholders. Monetary penalties were imposed on Noticees No. 1 to 5, 7, 8 and 9; no penalty was imposed on deceased Noticee No. 6, but disgorgement proceedings were continued against his legal representatives.
Full text
` Order in the matter of Kirloskar Brothers Limited Page 1 of 113 WTM/MPB/IVD/ ID1/139/2020 SECURITIES AND EXCHANGE BOARD OF INDIA
` Order in the matter of Kirloskar Brothers Limited Page 2 of 113 SCN No. SEBI/HO/IVD/ID1/OW/P/2019/33129/1 dated December 12, 2019 – SCN-3 SSCN No. SEBI/HO/IVD/ID1/OW/P/2020/12206/1 dated July 24, 2020 – SSCN -3
` Order in the matter of Kirloskar Brothers Limited Page 3 of 113 SHOW CAUSE NOTICE 4. Thereafter, a Common Show Cause Notice dated December 10, 2019 (hereinafter referred to as ‘SCN-1’) was issued to Alpana R. Kirloskar (hereinafter referred to as “Noticee No. 1” / “Alpana”), Arti Atul Kirloskar (hereinafter referred to as “Noticee No. 2” / “Arti”), Jyotsna Gautam Kulkarni (hereinafter referred to as “Noticee No. 3” / “Jyotsna”), Rahul Chandrakant Kirloskar (hereinafter referred to as “Noticee No. 4” / “Rahul”), Atul Chandrakant Kirloskar (hereinafter referred to as “Noticee No. 5” / “Atul”), Gautam Achyut Kulkarni (hereinafter referred to as “Noticee No. 6” / “Gautam”) (since deceased) through Legal Representatives namely, Jyotsna Gautam Kulkarni, Nihal Gautam Kulkarni (hereinafter referred to as “Nihal”) and Ambar Gautam Kulkarni (hereinafter referred to as “Ambar”) [Jyotsna, Nihal and Ambar together referred to as “LRs of Noticee No.6”] and a common Supplementary Show Cause Notice dated July 24, 2020 (hereinafter referred to as ‘SSCN-1’)was issued to Noticee No. 1 to 5 in the matter of KBL to show cause as to why: 4.1. appropriate penalty and directions including disgorgement of the loss avoided by Noticee No. 1 to 5 while trading in the shares of KBL, be not issued against Noticee No. 1 to 5 under sections 11(1), 11(4), 11B(1), 11B(2) read with 15G, 15HA, and 11(4A) of SEBI Act, 1992 read with Rule 4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules
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Source: SecMarx — sebi:WTM/MPB/IVD/ID1/139/2020. 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.