TFL ex-director fined Rs 2 lakh

MUMBAI: The Securities and Exchange Board of India (Sebi) has slapped a fine of Rs 2 lakh on former Tata Finance (TFL) director JE Talaulicar for violation of insider trading norms in his transactions in TFL shares in April ’01. Mr Talaulicar had sold 1 lakh shares of TFL on April 4, ‘01, when the rights issue of the company was open for subscription. The rights issue offer document had not mentioned the fact that Niskalp Investment and Trading Company, a subsidiary of TFL, was making heavy losses.

“The final letter of offer in respect of rights issue, which opened on March 30, ’01 and closed on April 30, ’01, disclosed the Profit After Tax (PAT) for NITCL at Rs 11.46 crore, as on September 30, ’00,” Sebi adjudicating officer Santosh Shukla noted in his order.

“The disclosure about price sensitive information that NITCL had incurred a loss of Rs 79.37 crore for the year ended March 31, ’01 was not available to public except the insiders including Shri Talaulicar till April 30, ’01 when TFL disclosed to its shareholders the said price sensitive information and gave an option to subscribers in the rights issue to withdraw their applications,” the order said.

“Thus, the said price sensitive information came in public information only on April 30, ’01. Therefore, any transaction by insiders between March 31, ’01 and before April 30, ’01 on the basis of the said unpublished price sensitive information would be in violation of the Prohibition of Insider Trading Regulations,” the order said.