Radico Khaitan's Compliance Officer Penalised for Failing To Monitor Trades of Designated Persons
Moneylife Digital Team 21 March 2024
Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs5 lakh on Amit Manchanda, former legal and Company secretary and compliance officer of Radico Khaitan Ltd (RKL), formerly known as Rampur Distillery & Chemical Company Ltd, for failing to monitor trades of designated person in the Company, thus breaching insider trading regulations.
 
In its 36-page order, Shashi Kumar Valsakumar, adjudicating office (AO) of SEBI, says, "It is noted that in light of large number of trades carried out by designated persons and their relatives which have been found to be in violation of PIT Regulation, Mr Manchanda has clearly failed in his responsibility to monitor trades for compliance with the Company's code of conduct and administer the PIT Regulations effectively in the Company."
 
The market regulator investigated the trading activities of 24 entities, including designated persons of Radico Khaitan and their immediate relatives in the Company scrip from April 2018 to 31 December 2022.
 
Perusing material available on record and evidence, the SEBI AO observed that all 24 entities (noticees) have remitted the unlawful gain to the Investor Education and Protection Fund (IEPF). "Further noticees have been penalised by the Company by imposing a monetary penalty. I further note that noticees have undergone debarment from buying or selling in the scrip of RKL."
 
SEBI also noted that before it issued a show cause notice (SCN), Radico Khaitan had already adjudicated the matter and, after examination, taken action, including giving certain directions which include levying penalty, remission of unlawful gains and debarment from buying or selling in the scrip of RKL.
 
However, the AO noted that RKL had not taken any action against Mr Manchanda regarding failure to administer the code of conduct under Regulation 9(3) of PIT Regulations. 
 
"In view of the discussion above, I hold that Mr Manchanda has failed to monitor the trades of all designated persons, compliance of the Company's code of conduct and administer the PIT Regulations effectively in the Company and thus did not fulfil responsibilities incumbent upon him under PIT Regulations thereby violated Regulation 9(3) of PIT Regulations,” SEBI says.
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