Sebi slaps Rs 2 lakh on VEL, drops case against MD, promoters

Last Updated: Friday, July 26, 2013 - 20:01

Mumbai: Market regulator Sebi on Friday imposed a fine of Rs 2 lakh on infrastructure firm Valecha Engineering Ltd (VEL) for alleged activities that could have amounted to insider trading, but dropped charges of the same against the company's top officials and promoter entities.

VEL has been fined for its failure to close the trading window at the time of the board meeting for the purpose of issuing convertible warrants as mandated under certain norms.

Securities and Exchange Board of India (Sebi) in its order said that VEL "has failed to comply with the provisions of the... PIT (Prohibition of Insider Trading) Regulations warranting imposition of monetary penalty".

However the regulator disposed of the case against VEL's Managing Director Jagadish K Valecha and Compliance Officer Kavita Valecha as the charges of non-compliances with norms against them "do not stand established".

Besides, the market regulator has dropped the allegations against VEL promoters -- Karan Valecha, Kapil Valecha and Valecha Investment -- for allegedly trading shares of the company while in possession of unpublished price sensitive information (UPSI).

Sebi had conducted a probe into the alleged irregularity in VEL scrip for the period January 1 and December 31, 2009.

The investigations found that VEL delayed disseminating price sensitive information to stock exchanges regarding certain projects received by the company. This according to Sebi was against norms for 'prohibition of insider trading'.

The company had also failed to close the trading window at the time of the board meeting for the purpose of issuing convertible warrants mandated under the norms.

While, Sebi concluded that "the information of receiving of projects/ orders cannot necessarily be considered as price sensitive", it noted that the company had violated the norms when it failed to close the trading window.

Meanwhile, based on its observation that bagging projects by a firm did not amount to price sensitive information, Sebi dismissed charges for insider trading norms violations against Jagadish Valecha, Kavita Valecha, Kapil Valecha and Karan Valecha.


First Published: Friday, July 26, 2013 - 20:01

More from zeenews

comments powered by Disqus