Alpana R. Kirloskar & Ors vs Securities And Exchange Board Of India

The appellants are aggrieved by the order of the Whole Time Member (‘WTM’ for short) by which they have been restrained from

accessing the securities market for a period of six months. The appellants have also been directed to disgorge certain amounts and penalties on the

charge of selling the shares of Kirloskar Brothers Ltd. to Kirloskar Industries Ltd. (hereinafter referred to as ‘KIL’) as a block deal on the

stock exchange platform in the year 2010. The allegation is that they have sold these shares while in possession of unpublished price sensitive

information.

In pursuance to the impugned order the bank accounts and the demat accounts of the appellants have been frozen.

Having heard the learned senior counsel for the parties we find that a number of issues arises for consideration and some of them are whether

there was an inordinate delay in the issuance of the show cause notice especially when the trades were done on the stock exchange platform. Further,

whether the transfer of the shares is in violation of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and

whether the direction to pay interest from the date of the transfer was justified.

In the light of the aforesaid, we direct the respondent to file a reply within six weeks from today. Three weeks thereafter to the appellant to file

rejoinder. The matter would be listed for admission and for final hearing on 2nd March, 2021.

It was urged that the impugned order should be stayed subject to the undertaking given by the appellants. On the other hand, the learned senior

counsel for SEBI contended that the appellants should be put to terms and should be directed to deposit a certain amount in cash. Considering the fact

that there appears to be a delay in the issuance of the show cause notice we are of the opinion that the undertaking given by the appellants would

protect interest of the respondent.

We, consequently, stay the effect and operation of the impugned order provided the appellant nos.1, 2, 4 and 5 will not sell their shares in KIL to the

value of Rs.10 crores each and appellant no.3 will not sell its shares in KIL to the value of Rs.20 crores each. The undertaking given by the appellants

before this Tribunal will also be given to the depository to ensure compliance. In case of any deviation it would be open to SEBI to move an

application for modification or vacation of this order.

Parties are directed to contact the Registrar 48 hours before the date fixed to find out as to whether the hearing would take place through video

conferencing or through physical hearing.

The present matter was heard through video conference due to Covid-19 pandemic. At this stage it is not possible to sign a copy of this order nor a

certified copy of this order could be issued by the registry. In these circumstances, this order will be digitally signed by the Private Secretary on behalf

of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Parties will act on production of a digitally signed

copy sent by fax and/or email.