: Slapped with insider trading charges by market regulator Sebi, top industrialist A Vellayan today "stepped aside" as Chairman of diversified Murugappa Group as also of two group firms, Coromandel International and EID Parry.
While rejecting the charges, the group said Sebi action was based on mere suspicion and Vellayan would take necessary legal action to defend his reputation.
EID Parry separately said in a regulatory filing that Vellayan is stepping down as chairman following yesterday's Sebi order but he will continue as a member of the board.
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"Vellayan is resolute in defending the serious harm to his reputation caused by this order and will take appropriate action as legally advised," Murugappa Group said in a statement.
"He is keen to also demonstrate bona fides and will extend full cooperation to SEBI to complete investigations expeditiously, apart from seeking redress against the premature measures adopted", it added.
Yesterday, Sebi had ordered impounding of Rs 2.15 crore lying in bank accounts of A Vellayan, his relative A R Murugappn and two others (Gopalkrishnan C, V Karuppiah) with immediate effect after finding them guilty in an insider trading case.
"...Prima facie it appears that the trading by Gopalkrishnan was based on the knowledge of UPSI (unpublished price sensitive information). Further, the trading of Karuppiah (HUF) also appear to be based on the knowledge of UPSI... It appears that the UPSI had passed on from Vellayan and Murugappan," Sebi had said.
Terming SEBI's charge as merely based "on suspicion and far-fetched tenuous conjecture," Murugappa Group said: "In keeping with the family values and tradition, he (Vellayan) has stepped aside from the Chairmanship of the Murugappa Group Corporate Board and of Coromandel International and EID Parry India until this matter is resolved."
"SEBI order linking A Vellayan to trades of two individuals in shares of Sabero Organics Gujarat Ltd, a company that was acquired by Coromandel International in May 2011 is based merely on "suspicion" and "a far-fetched tenuous conjecture".
"The only purported link sought to be made by SEBI between A Vellayan and these transactions is that A R Murugappan is a distant relative (son of a grand aunt) and had a property transaction with Vellayan way before the Sabero transaction was even thought about", it said.
"SEBI has jumped to the conclusion that the trades could potentially be attributed to suspected communication of unpublished price sensitive information about the Sabero deal by A Vellayan to this distant relative," it said.
