The Murugappa Group said the Securities and Exchange Board of India (SEBI) findings in a probe on allegations of insider trading in shares of Sabero Organics Gujarat Ltd. had vindicated its Executive Chairman A. Vellayan with the regulator observing that it never had a fair and reasonable basis to conclude that he was the source of information.
SEBI had last year passed an ex-parte order on the basis of prima facie suspicion about purchases of Sabero shares by some persons ahead of an announcement only to sell the shares right after the information was made public, the company said in a statement to the media.
“After reviewing replies and conduct of personal hearing in the matter, the regulator has found that there was no material evidence in the Investigation Report which could lead to the conclusion (arrived by the investigation) that none of the suspected entities (except Gopalakrishnan and Karuppiah) could be connected to the persons privy to the Unpublished Price Sensitive Information (UPSI),” the group said.
Mr. Vellayan had, in May 2015, stepped down as Chairman of the Murugappa Group in the wake of the market regulator making charges of insider trading against him.
He had returned to the position in October after the Group Corporate Board requested him to return to the helm following an assessment of the merits of the case and legal advice from Senior Counsel.
“On the basis of the findings of the investigation it is difficult to arrive at a conclusion as to who exactly passed the information to Murugappan and thereby to Gopalakrishnan and Karuppiah,” the group’s statement cited SEBI’s latest order as saying. The order states categorically that there is no collateral material on record to support the assertion/conclusion that UPSI has flowed from Mr. Vellayan, the group said.