Sebi fined Piramal Enterprises and its promotersAjay G. Piramal, Swati A. Piramal, Nandini Piramal and N. Santhanamfor violating insider trading norms
New Delhi: The Securities and Exchange Board of India (Sebi) has fined Piramal Enterprises Ltd and its promoters—Ajay G. Piramal, Swati A. Piramal, Nandini Piramal and N. Santhanam—for violating insider trading norms while selling its healthcare business to Abbott Laboratories Ltd in May 2010.
The five entities have been asked to pay Rs6 lakh as fine for breaching two norms, adjudicating officer S.V. Krishnamohan said in a order.
The first breach relates to the failure to close Piramal Enterprises’s trading window while the price-sensitive information was unpublished and the trading day after the information was made public. Sebi rules say the trading window for designated employees and directors should remain closed when such information is not public yet and for 24 hours after it is published to prevent insiders from making undue gains.
“However, the trading window was not closed at all," Sebi said in its order.
While the trading window was kept open after the public announcement, an employee of Piramal traded in its stock. However, he was not penalized because of the failure to close the trading window and because he did not know any price-sensitive information, Sebi said.
Sebi also said the five entities failed to handle the price-sensitive information properly. Information on the deal was shared with Anand Piramal, who is neither an employee nor a director on the board (although he is part of the promoter group). In May 2010, Piramal sold its domestic healthcare business to Abbott for a consideration of $3.72 billion and announced the plan to stock exchanges on 21 May 2010.
“This issue pertains to a procedural provision with no gains to the promoter family or the management. Once we receive the order from Sebi, we will evaluate our options," Piramal Enterprises said in statement on Monday.
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