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Wockhardt CFO held guilty of insider trading

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Press Trust Of India New Delhi
Last Updated : Jan 29 2013 | 2:16 AM IST

The Supreme Court on Thursday upheld a sectoral tribunal’s ruling which held Wockhardt’s Chief Financial Officer (CFO) Rajiv B Gandhi and others guilty of insider trading.

A bench headed by Justice S H Kapadia rejected Gandhi’s plea challenging the Securities Appellate Tribunal’s judgement which refused to set aside the penalty imposed by SEBI for violation of Regulations 3 and 4 of the Securities and Exchange Board of India (Insider Trading) Regulations, 1992, read with Section 15G of the Act. Senior counsel C A Sundaram said Gandhi had not executed any trade and could not be held liable for insider trading.

Sebi while holding Gandhi, his wife Sandhya Gandhi and his sister Amishi Gandhi guilty of insider trading had imposed a penalty of Rs 5 lakh on each of them on the ground that they had traded in the scrip of Wockhardt on the basis of unpublished price sensitive information and the same was not available to the investors in general.

It alleged that Gandhi being the company secretary and CFO had access to the price sensitive information pertaining to the financial position of the company.

According to Sebi, the company’s results for the December 1998 quarter showed its negative performance over the previous quarter and because of this the Gandhis’ sold shares on January 21 and 22, 1999 before the board meeting and before the market could react to the financial results.

Besides, Amishi and Sandhya had also purchased shares of the company when the price had fallen after the board meeting.

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First Published: Sep 12 2008 | 12:00 AM IST

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