 "SAT upholds Sebi order on Ramsarup Industries 2 promoter firms")
Earlier this year, Securities and Exchange Board of India (Sebi) had imposed a penalty of Rs 40 lakh on N R Mercantiles and Rs 13.50 lakh on Imtihan Commercial for trading in the shares of Ramsarup while in possession of price sensitive information such as financial results of the firm.
N R Mercantiles and Imtihan Commercial are controlled by Ramsarup Industries Chairman and MD Ashish Jhunjhunwala.
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Both the entities had filed an appeal with SAT challenging Sebi's orders against them.
In its order today, SAT said: "Facts on record clearly show that both appellant companies were controlled by Ashish Jhunjhunwala and Ashish Jhunjhunwala as Chairman and Managing Director of Ramsarup Industries was privy to price sensitive information of Ramsarup Industries when he sold Ramsarup Industries shares held by appellants during the period when trading window of Ramsarup Industries was closed."
"...We find no merit in these appeals and accordingly both appeals are dismissed with no order as to costs," it added.
The case relates to Sebi probe into affairs relating to dealing in shares of Ramsarup Industries during the period from July 1, 2010 to August 31, 2010.
According to the market regulator, Jhunjhunwala was privy to financial results of Ramsarup Industries for quarter ending on June 30, 2010 and therefore, sale of shares of the firm by him on behalf of the two entities during the period when trading window of the company was closed constituted violation prevention of insider trading norms.