Sebi bans Polaris CMD from market for 2 yrshttps://indianexpress.com/article/news-archive/web/sebi-bans-polaris-cmd-from-market-for-2-yrs/

Sebi bans Polaris CMD from market for 2 yrs

* Decision comes on allegations of insider trading

The Securities and Exchange Board of India (Sebi) has barred Polaris Software Labs chairman and managing director Arun Jain from the securities market for a period of two years for alleged insider trading in the company’s shares.

Sebi had conducted investigation into the dealings in the scrip of Polaris Software based on media reports that the company had,after due diligence,called off the proposed acquisition of Data Inc of the US in the second week of September 2000 but had belatedly informed the concerned stock exchanges.

“During the investigations,it was observed that the company had deliberately withheld this price sensitive information from the public domain. During August 23,2000,to September 19,2000,Allsec Securities Ltd (Allsec),a Chennai-based broking company had dealt in the scrip of the company on behalf of its clients. Polaris Holding Private Limited (PHPL) was one of such clients of Allsec,” Sebi said in its order on Tuesday.

According to the Sebi,PHPL,holding of 36 per cent in the company,was one of the promoters of the company. Jain was one of the promoters and CMD of the company while his wife Manju Jain was a director.

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“I find that the noticee being ‘insider’ CMD was in possession of the ‘unpublished price sensitive information’ when PHPL sold 15,080 shares of the company. The noticee (Arun Jain) and Mrs Manju Jain were the directors of PHPL when the shares were sold. Further,the shares were sold at the instruction of the noticee when he was in possession of ‘unpublished price sensitive information’ about the company.

“Thus,I find that the said trading in 15,080 shares was motivated by the information in the possession of the noticee and was on the basis of unpublished price sensitive information,” said the order by Whole Time Member RK Agarwal.

“In this case,the violations occurred in the year 2000 and pursuant to investigations,enforcement actions were decided in 2005. In my view,insider trading particularly by the CMD should be dealt with severely,” the order said.