SEBI questions HLL share deal

MUMBAI, Aug 4: SEBI has shot off a letter to Hindustan Lever Ltd (HLL) and its directors seeking an explanation as to why the company purchased some eight lakh shares of Brooke Bond Lipton barely a month before the decision to merge the two companies was taken.

According to the findings of a SEBI inquiry into allegations of insider trading into Brooke Bond Lipton shares prior to the merger announcement on April 19, HLL bought around eight lakh shares in one single spot deal in March 1996. These shares were supplied by the Unit Trust of India at an average price of Rs 350 per share, aggregating Rs 28 crore.

“We have communicated the findings to the company and its board of directors,” said LK Singhvi, SEBI executive director. “The company has been given two weeks’ time to give an explanation before we take any further action under the SEBI Insider Trading Rules, 1995,” Singhvi added. He however, refused to divulge any further details. Reacting to SEBI’s notice, a HLL spokesperson from Bangalore said that the SEBI allegation holds no water.