Murugappa Group executives charged with insider trading

Mumbai: The BSE Sensex is witnessing one of its worst periods in history because of a rather volatile market situation which has destabilized the strength of the rupee and subsequently lost a lot of people money and scared foreign investors in the short term.

The worries of the market were propounded on Thursday when the Securities and Exchange Board of India slapped charges of insider trading charges on A Vellayan, executive chairman of the Murugappa Group and three others.

The Murugappa Group has wide business interests ranging from sugar and abrasives.

When contacted, Murugappa Group said they would make an official statement by afternoon.

In an order posted on its website, the market regulator said that Vellayan had passed unpublished price-sensitive information on the acquisition of Sabero Organics Gujarat Ltd by Coromandel International Ltd, a group company, to some individuals who traded in the shares of Sabero on the basis of that information. Vellayan is the chairman of Coromandel International.

Vellayan passed the information to C. Gopalakrishnan, who in turn exchanged it with V. Karuppiah and A.R. Murugappan, the regulator said. The three have been named in the Sebi order, while all four of them have been asked to surrender unlawful gains along with an interest of Rs.2.15 crore.

“The prima facie financial links among C. Gopalakrishnan, A.R. Murugappan and A. Vellayan have been traced,” said the market regulator.

Sebi initiated preliminary examination after receiving complaints alleging that the unpublished price-sensitive information pertaining to the acquisition of the shares of Sabero had been leaked. A detailed investigation was conducted between 15 May 2011 and 15 June 2011.

Sabero is in the business of manufacturing chemical intermediates for pesticides and flame retardant. The share price of Sabero at BSE increased from Rs.58 on 16 May 2011 to Rs.127 on 9 June 2011, after touching Rs.130.50 on 6 June 2011. Similarly, at the National Stock Exchange, the price increased from Rs.57.80 on 13 May 2011 to Rs.126.45 on 15 June 2011, after touching a high of Rs.130.90 on 14 June 2011.

LEAVE A REPLY

Please enter your comment!
Please enter your name here