As per investigation report and replies to SEBI’s show-cause notices issued in March, the regulator found that executive chairman Manoj Gaur and others had violated guidelines relating to insider trading by purchasing shares during the period when trading was closed
Mumbai: Capital market regulator Securities and Exchange Board of India (SEBI) has imposed penalty totalling Rs70 lakh on three senior executives of Jaiprakash Associates (JAL), including executive chairman Manoj Gaur, and their relatives for involvement in insider trading, reports PTI.
Besides Mr Gaur, his wife and brother, SEBI has named JAL senior vice president (corporate affairs) and company secretary Harish K Vaid and his Hindu Undivided Family (HUF), as well as the company’s whole-time director S D Nailwal.
SEBI conducted investigation into the trading in scrips of JAL during the period of 29 September to 27 October 2008.
As per investigation report and replies to SEBI’s show-cause notices issued in March, the regulator found that Mr Gaur and others had violated guidelines relating to insider trading by purchasing shares during the period when trading was closed.
The noticees were found to have bought shares of the company during the period when trading window was closed while they were in possession of the unpublished price sensitive information.
SEBI said the company received the trial balances for the quarter ended 30 September 2008 from its various units in the first week of October 2008.
It said the consolidated trial balance of JAL for the quarter ended 30 September 2008 was available on 12 October 2008 and the company’s board approved the consolidated quarterly results on 21 October 2008 as well as declared interim dividend of 15%.
It had also approved issuance of shares on rights basis.
“In view of the above, the period from 11 October 2008 to 21 October 2008 was considered as the period when the information about the financial results and interim dividend was unpublished price sensitive information,” SEBI order said.
Mr Gaur, his wife Urvashi Gaur and his brother Sameer Gaur have been fined Rs10 lakh each.
Similar fines have been imposed on Mr Vaid and his HUF, while Mr Nailwal has been handed a total fine of Rs20 lakh.
Jaiprakash Associates executive chairman Manoj Gaur said the findings in the SEBI order are “completely erroneous and contrary to factual position” and will challenge it in SAT.
“It is unfortunate that despite adequate representation to the adjudicating officer, frivolous inferences have been drawn. Aggrieved by the order, we are in the process of challenging the same before the Securities Appellate Tribunal,” Mr Gaur said in a late night statement.
He noted that findings in the order relate to purchase of “1,000 shares by my wife and 7,400 shares by my brother, between 13 to 16 October 2008 (which purchase was not done based on any insider information and the said shares were not even sold)”.
The Ambani brothers wield so much clout not just in business and political arena but on the markets, as well. Today, wild “rumours” were spread that the Ambani siblings—Mukesh and Anil—would be patching up and the markets shot up in what would be characterised as a dull trading session
No, we are not talking about the Reliance Power Company. We are talking about how much power the Ambani family has. Today, wild “rumours” were spread that Mukesh Ambani of Reliance Group and Anil Ambani of the ADAG Group would be patching up and the markets shot up in what would be characterised as a dull trading session. The Sensex was hovering around at 15,755 at around 2.26 pm, before the rumour machine kicked in and propelled it up to 15,978, a rise of over 220 points within a span of just 16 minutes! That is a whopping 1.42% upside move in a short timeframe. People close to the family who knew of the “rumour” beforehand would have pocketed a tidy sum of money, at the expense of the small investor who had no idea of this move.
What does this finding tell us? Simple. The Ambani brothers wield so much clout not just in business and political arena but on the markets, as well. For instance, Mukesh Ambani had bailed out the TV18 Group, cleaned up its debt-ridden balance sheet, and effectively taken control of the media conglomerate. In this case, the rumour would have only helped the Anil Ambani group whose stocks shot up 5-7%. Immediately, thereafter denial came and the market slumped back.
Will the Securities & Exchange Board of India (SEBI) check who traded the most before the rumour spread like wildfire? Rumour-mongering has been an old trick of the Ambanis and this episode shows, very little has changed.
Events would decide the market’s move next week
The market closed flat with a positive bias today on buying support in select blue-chips in the last hour. The 20-day moving average on the Nifty was 4,709. At present the index is in an indecisive phase. The benchmark made a lower low today, however, towards the end of the day it made higher high on a volume of 53.95 crore shares on the National Stock Exchange (NSE).
The market opened in the negative, taking cues from the disappointing start by the Asian pack on unending European woes and a weak euro. Concerns about lower quarterly earnings by corporates also weighed on the investors. The Nifty opened 26 points down at 4,724 and the Sensex lost 68 points to 15,789 at the opening bell. Auto, consumer durables, fast moving consumer goods, and IT stocks faced intense selling pressure in early trade.
Shares of Kingfisher Airlines plunged over 11% in morning trade after State Bank of India (SBI), the company’s largest creditor, declared its exposure to the air carrier a non-performing asset. After a weak start, the stock fell further to an early low of Rs18.15, down 11.24% over the previous close, on the NSE. On the BSE, the stock fell 10.75% to an early low of Rs18.25.
The sell-off led the indices to the day’s low in mid-morning trade. At the lows, the Nifty fell to 4,687 and the Sensex went back to 15,665. The market was range-bound in till around 2.15pm, after which select buying pushed the benchmarks into the positive. The indices hit their highs in the last hour with the Nifty rising to 4,795 and the Sensex going up to 16,001.
However, choppiness in late trade saw the indices coming off the highs and closing flat for the second day. The Nifty closed four points higher at 4,754 and the Sensex settled at 15,868, up 11 points.
The advance-decline ratio on the NSE was in favour of the declining stocks at 688:717.
In the broader market space, the BSE Mid-cap index shed 0.09% while the BSE Small-cap index rose 0.02%.
The sectoral gainers were BSE Oil & Gas (up 1.06%); BSE Fast Moving Consumer Goods (up 0.87%); BSE Bankex (up 0.49%) and BSE Healthcare (up 0.06%). The top losers were BSE Capital Goods (down 1%); BSE Realty (down 0.87%); BSE TECk (down 0.78%); BSE Power (down 0.69%) and BSE Consumer Durables (down 0.60%).
Reliance Industries (up 2.52%) was the top gainer on the Sensex today. It was followed by HDFC Bank (up 2.25%); Hindalco Industries (up 2.02%); Maruti Suzuki (up 1.76%) and ITC (up 1.23%). The key losers were Hero MotoCorp (down 5.12%); Jaiprakash Associates (down 4.58%); Bharti Airtel (down 4.11%); Jindal Steel (down 3%) and DLF (down 2.65%).
The top performers on the Nifty were Reliance Communications (up 5.43%); Reliance Infrastructure (up 4.31%); BPCL (up 4.17%); Reliance Power (up 3.81%) and HDFC Bank (up 2.67%). Hero MotoCorp (down 5.56%); JP Associates (down 4.75%); Bharti Airtel (down 4.01%); Jindal Steel (down 3.23%) and DLF (down 2.97%) led the losers.
Markets in Asia closed lower on European worries and ahead of monthly jobs data from the US, slated to be announced later today. Chinese stocks gained on speculations that the government will ease lending restrictions. The Seoul Composite index fell over 2% in intraday trade on rumours of a possible downgrade of France’s sovereign rating.
The Hang Seng declined 1.17%; the Jakarta Composite fell 0.94%; the KLSE Composite shed 0.02%; the Nikkei 225 tanked 1.16%; the Seoul Composite dropped 1.11% and the Taiwan Weighted shed 0.15%. Bucking the trend, the Shanghai Composite gained 0.70% and the Straits Times rose 0.09%. At the time of writing, the key European markets were trading with gains of 0.25% to 0.63% and US stocks futures were trading higher.
Back home, foreign institutional investors were net buyers of stocks totalling Rs381.42 crore on Thursday while domestic institutional investors were net sellers of shares amounting to Rs289.21 crore.
Suzlon Energy arm REpower has won an order from a wind farm in Portugal. The company will supply 11 turbines to the wind farm in Central Portugal that will generate 22 MW power. The project is scheduled to be commissioned in the third quarter of fiscal 2013, Suzlon Energy said on Friday. The stock gained 0.27% to close at Rs18.30 on the NSE.
Aditya Birla group firm Idea Cellular today approached telecom tribunal TDSAT against the government’s move to impose additional liquidated damages on it for not meeting roll-out obligations in two circles. Idea said the additional penalty has been imposed for the Haryana and Maharashtra circles, for which the main penalty has already been set aside by TDSAT on 5th December. The stock ended flat at Rs82.45 on the NSE.
Kolkata-based Srei Infrastructure Finance plans to raise around Rs1,400 crore of debt in the current quarter to support its growth, a top company official said. The NBFC engaged in financing infrastructure projects had decided to mop up Rs300 crore through a bond issue which opened for subscription on 31st December and will close on 3st January. The stock declined 2.80% to close at Rs26 on the NSE.