Sebi disposes of case against Aurobindo Pharma’s promoter
Sebi disposes of case against Aurobindo Pharma promoter Sumanth Kumar Reddy Mettu in an insider trading case as the firm has already fined him in the matter
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New Delhi: The Securities and Exchange Board of India (Sebi) on Monday disposed of a case relating to violation of insider trading norms against Sumanth Kumar Reddy Mettu, promoter of Aurobindo Pharma Ltd.
The pharma firm has already imposed a fine on him and cautioned him against future defiance.
A probe conducted by Sebi found that Mettu had traded for 40,000 share option contract in derivatives of Aurobindo Pharma on 30 May 2013 during trading window closure period just before announcement of quarterly results in violation of insider trading regulations.
However, Aurobindo Pharma, on its own, had imposed a penalty of Rs5 lakh on Mettu for indulgence into derivatives transaction in violation of code of conduct of the company, the markets regulator said in its order. Aurobindo Pharma had asked Mettu to pay the amount in favour of Prime Minister’s National Relief Fund, it added.
“It has been established that the company had already imposed penalty of Rs5 lakh upon the noticee (Mettu) and also cautioned him to ensure strict compliance of code of conduct of Aurobindo Pharma to avoid such violations in future.
“...therefore, I am of the view that...actions taken by Aurobindo Pharma are commensurate to the violation committed by the noticee,” said Rachna Anand, general manager and adjudicating officer at the capital markets regulator.
Anand further said that action taken by the company are justifiable to such breach and further imposing of penalty upon the entity would not be appropriate and would tantamount of punishing twice for the same cause of action. Accordingly, Sebi has disposed of the case against Mettu.