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Aurobindo, promoters settle insider trading case with Sebi
Aurobindo Pharma, its promoter PV Ramprasad Reddy, his wife P Suneela Rani, and three other entities have settled an alleged insider trading case with markets regulator Sebi after paying over Rs 22 crore towards settlement charges.
New Delhi: Aurobindo Pharma, its promoter PV Ramprasad Reddy, his wife P Suneela Rani, and three other entities have settled an alleged insider trading case with markets regulator Sebi after paying over Rs 22 crore towards settlement charges.
The three other entities that have settled the matter with the regulator are Kambam P Reddy, Trident Chemphar Ltd and Veritaz Health Care Ltd. "The pending enforcement proceedings for the alleged defaults are settled," Sebi said in a settlement order dated May 6.
It, further, said it would not initiate enforcement action against the entities for the defaults. The order comes after these entities approached Sebi proposing to settle the case "without admitting or denying the findings of fact and conclusions of law" through a settlement order.
Accordingly, APL settled the case after paying Rs 2.2 crore towards settlement amount, Ramprasad Reddy paid Rs 6.6 crore, Rani (Rs 2.64 crore), Kambam P Reddy (Rs 34.65 lakh), Trident Chemphar (Rs 7.92 crore) and Veritaz Health Care (Rs 2.31 crore). Besides, they paid Rs 60,000 each as legal costs.
It was alleged that Ramprasad Reddy, Rani, Kambam P Reddy, Trident Chemphar and Veritaz Health Care had traded in the scrip of APL on the basis of unpublished price-sensitive information (UPSI) pertaining to the company's licensing and supply agreements with Pfizer Inc.
Sebi had conducted an investigation into the trading in the scrip of Aurbindo Pharma Ltd (APL) during the period from July 2008 to March 2009 and found that Pfizer and APL had issued press releases on March 2, 2009, and March 3, 2009, respectively, regarding certain licensing and supply agreements entered into between them on July 22, 2008, November 30, 2008 and December 29, 2008. The press releases were followed by an increase in price of the scrip of APL.
Sebi noted that the five entities were allegedly found to have traded in the scrip of APL prior to the information about the licensing and supply agreements becoming public. Due to their connection with APL, the five entities were alleged to be insiders under the PIT Regulations and since they bought shares of APL during the UPSI period, they were alleged to have traded in APL shares in violation of the PIT Regulations.
