September
22, 2009
PR No. 301/2009
Order in the matter of KLG Capital Services Limited
Shri M.S.Sahoo, Whole Time Member, SEBI has passed an order dated September 22, 2009 in the matter of KLG Capital Services Limited against Mr.Hemant R. Patel, President, SKIL Infrastructure Limited, Mr. Praveen Mohnot, Executive Director, SKIL Infrastructure Limited, Ms. Priyanka Singhvi, daughter of Mr. Praveen Mohnot, Mr. N. Ravichandran, Director, SKIL Infrastructure Limited and Ms. Anita Ravichandran, wife of Mr. N. Ravichandran, for violations under SEBI (Prohibition of Insider Trading) Regulations, 1992.
Awaita Properties Pvt. Ltd. (APPL) acquired 17,11,287 equity shares of KLG Capital Services Limited (KLG) through market transactions during February 22-27, 2008. This acquisition increased its shareholding in KLG to 60.46%. It was observed that the above entities were closely linked to the acquirer APPL, the erstwhile promoters of KLG with regard to their plans to find an acquirer and Networth Stock Broking Limited for effecting the acquisition, and, therefore, had access to the unpublished price sensitive information (UPSI). They communicated the UPSI to their relatives and while in possession of the UPSI, they undertook the transactions in the shares of KLG.
It was held in the order of Whole Time Member that if the submissions of the defense was accepted it would severely restrict the scope of the term �insider� and the persons not connected or not deemed to be connected with the company, but in possession of the UPSI, would deal in shares of the company with impunity. Similarly, any third party could receive UPSI from connected persons, and would merrily deal in securities based on such UPSI and escape the prohibition on insider trading. No person associated with an acquirer or acting in concert with others would ever be held liable for trading on inside information.
The order has:
| (i) |
Directed that Mr. Hemant Patel and Mr. Praveen Mohnot are restrained from accessing the securities market and further prohibited from buying, selling, dealing in securities in any manner whatsoever and shall not hold position of Director in the Board of Directors of any listed company for a period 5 years from the date of this order. |
| (ii) |
Directed that Mr. N. Ravichandran is restrained from accessing the securities market and further prohibited from buying, selling, dealing in securities in any manner whatsoever and shall not hold position of Director in the Board of Directors of any listed company for a period 2 years from the date of this order. |
| (iii) |
Directed that Mrs. Priyanka Singhvi and Mrs. Anita Ravichandran are restrained from accessing the securities market and further prohibited from buying, selling, dealing in securities in any manner whatsoever , for a period 5 years from the date of this order. |
| (iv) |
Directed to disgorge the unjust enrichment, and the interest thereon at 12% for one year, as indicated in the table below against them: |
|
Name
|
Disgorgement
(Rs.)
|
Interest
(Rs.)
|
Total
(Rs.)
|
|
Mr.
Hemat Patel
|
42,58,153
|
5,10,978
|
47,69,131
|
|
Mrs.
Priyanka Singhvi
|
Realised:
23,53,888
Unrealised:
4,10,42,993
|
2,82,467
--------
|
4,36,79,348
|
|
Mrs.
Anita Ravichandran
|
54,61,000
|
6,55,320
|
61,16,320
|
The order shall come into force with immediate effect.
Mumbai
September 22, 2009
|
For full copy of order against ANITA RAVICHANDRAN, click here.
For full copy of order against HEMANT R.PATEL, click here.
For full copy of order against HEMANT R.PATEL (HUF), click here.
For full copy of order against N.RAVICHANDRAN, click here.
For full copy of order against PRAVEEN MOHNOT, click here.
For full copy of order against PRIYANKA SINGHVI, click here.
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