SEBI penalizes director (‘noticee’) for non-compliance of Insider Trading Regulations, wherein director’s wife traded in co. shares (when RBI restrained co. from accepting/renewing public deposits) without obtaining pre-clearance; Rejects noticee’s argument that board of directors discussed and conveyed it’s no objection on such share sale in its meeting, states that neither agenda nor minutes contains such decision, holds that there are prescribed procedures in conducting and convening Board Meetings under company law & secretarial practice, wherein agenda papers are circulated in advance, decisions are recorded and minutes are maintained; States the object of obtaining pre-clearance of trades by directors and their dependents is to ensure that trades in shares of co. in which they are associated are not based on price-sensitive information, notes such prescribed application and undertaking was not made; Explains purpose of Model Code for prevention of insider trading, states that Code monitors and regulates transactions of persons close to co. management, opines that “merely because the company has not defined the term ‘dependant’ in terms of financial limits, it cannot be said that a spouse with independent income can trade without the other spouse who is on the Board obtaining pre-clearance”; Rejects noticee’s contention that share sale is mere ‘technical violation’ and does not warrant any penalty, observes that violation was repetitive in nature as noticee’s wife failed to obtain pre-clearance for two transactions, relies on SC ruling in SEBI Vs. Shri Ram Mutual Fund:SEBI
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