In an over six-year-old insider trading case in shares of RIL group's erstwhile entity IPCL, Sebi today disposed of charges against Alaska Mercantile as this entity could not be proved to be an 'insider'.
Alaska Mercantile, a share trading entity having one Padam Jain as its main shareholder, was being probed for allegedly being an insider entity trading in shares of IPCL in early 2007 on the basis of access to 'unpublished price sensitive information'.
However, Sebi said in its final order passed today that the "alleged violation" of the Prohibition of Insider Trading Regulations could not be established and the matter has been accordingly disposed of.
IPCL (Indian Petrochemicals Corp Ltd) originally used to be a public sector entity and was acquired by Reliance Industries as part of a government disinvestment programme. Later in March 2007, IPCL was merged with Mukesh Ambani-led RIL and it ceased to be a separate listed entity.
Incidentally, Sebi had disclosed in January, 2013 that it rejected a consent plea by Alaska Mercantile in this case, along with 15 other applications from RIL-related entities in various matters including IPCL insider trading case.
Of those 16 cases, a few cases have been closed since then, while appeals have been filed before the Securities Appellate Tribunal in some other matters. Some of the cases are still before Sebi and the orders are yet to be passed.
In April this year, Sebi had also disposed of charges against Manoj Modi and his wife Smita, as it could not be established that they were 'insiders' in IPCL share dealings.
However, Sebi imposed a fine of Rs 11 crore on another entity, named Reliance Petroinvestments, in May this year, after finding it guilty of violating insider trading norms in this IPCL case.
The Sebi order has been challenged before SAT.
Sebi had found that IPCL shares had witnessed an unusual plunge of over 8 per cent on March 5, 2007, despite the announcement of an interim dividend, and had witnessed a substantial surge on March 8-9, 2007, subsequent to an announcement of amalgamation of IPCL with RIL.
Consequently, it had ordered a probe into alleged violations of insider trading regulations by Alaska Mercantile by way of trading in the company's shares on the basis of price sensitive information relating to the dividend and amalgamation matters.
It was alleged that Alaska bought 5,09,997 shares of IPCL from February 27, 2007 to March 2, 2007 and sold all the shares of IPCL in the month of March 2007.
