Bengaluru, Aug 4 (SocialNews.XYZ) The Securities Appellate Tribunal (SAT) in a recent ruling quashed the charges of insider trading in Biocon levelled against Shreehas P. Tambe, President and Deputy CEO of Biocon Biologics.
The SAT also set aside the direction of the Securities and Exchange Board of India (SEBI) restraining Tambe from accessing the securities market and prohibiting him from being associated with any listed company for a period of three months.
The tribunal in its ruling on Appeal No. 491 of 2021 and decided on July 26, 2022 said Tambe was entitled to the benefit of proviso to Regulation 4(1) of the PIT Regulations, which provides that an insider may prove his innocence by demonstrating the circumstances for trading in securities while in possession of UPSI.
It found that the actions of Tambe seeking pre-clearance from the company to trade in the shares and the use of the sale proceeds as bona fide payment for the purchase of a flat demonstrated his innocence against the presumption of a motivated trade.
The SAT said that it was satisfied that the trades executed by Tambe were bona fide trades with a legitimate purpose. The SAT also ruled that Tambe is not guilty of insider trading and, therefore, has not violated Regulation 4(1) of the Prohibition of Insider Trading Regulations, nor has he violated Clause 6 of the Code of Conduct.
In view of this conclusion, the SAT also quashed and set aside the order to the extent of the charges pertaining to insider trading.
The impugned SEBI order had levied a penalty on two counts -- Rs 1 lakh for insider trading charges and another Rs 1 lakh on account of delayed reporting. The SAT expunged the charges related to insider trading and only upheld SEBI's penalty of Rs 1 lakh for delayed disclosure under Regulation 7(2)(a).
The SEBI had issued a show-cause notice on August 3, 2020 alleging that Tambe had traded in the shares of Biocon Ltd while in possession of unpublished price sensitive information (UPSI) pertaining to the company's collaboration with Sandoz.
It had alleged that he had sold 17,440 shares of Biocon between December 19, 2017 and December 27, 2017 and delayed disclosure beyond the stipulated period of 48 hours, violating the SEBI PIT (Prohibition of Insider Trading) Regulations and the SEBI Act.
Subsequently, SEBI had in an order dated June 30, 2021 restrained him from accessing the securities market and associating with any listed public company or any public company for a period of three months and further imposed a monetary penalty of Rs 2 lakh.
Tambe had then appealed to the SAT against the SEBI order, contending that he had executed the trades while not being in possession of UPSI. He had also taken pre-clearance from the company as per applicable procedures and had sold the shares for the bona fide purpose of purchasing a flat and paying the developer.
Source: IANS
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