Order against Shri Rakesh Agarwal, Managing Director of ABS Industries Limited under the SEBI Act and SEBI (Insider Trading) Regulations.

IES DEPARTMENT 


Investigations were conducted by SEBI into the alleged Insider Trading by certain entities/persons prior to announcement of takeover of ABS Industries by Bayer Industries. Investigations brought out that shares were purchased in the name of person who was close relative of the M.D of the ABS Industries prior to information of taking over of the ABS Industries by Bayer Industries became public. It was also seen that funds for these purchases were received from the Managing Director and investment companies of the Managing Director. It was also brought out that shares were purchased with the knowledge of impending takeover of the Company by Bayer Industries. The shares purchased by relative of Managing Director, were offered in the open offer made to the shareholders of ABS Industries by Bayer Industries. 
 
On completion of investigations, findings thereof were communicated to Shri Rakesh Agarwal as required under the Insider Trading Regulations. Pursuant to hearing, an Order has been passed by SEBI directing Shri Rakesh Agarwal the Managing Director of ABS Industries Limited to deposit Rs.34,00,000/-,within 30 days of date of communication of the order, with Investor Protection Funds of the Stock Exchange, Mumbai and National Stock Exchange (in equal proportion - i.e Rs.17,00,000 each) to compensate any investor which may make a claim subsequently for shares sold by him to relative of Shri Rakesh Agarwal during September 9 to October 1,1996. 
 
Further, it was also ordered that prosecution be launched by SEBI against Shri Rakesh Agarwal.