Insider trading prohibition breached where a director traded before material information was publicly disseminated.

A director and connected person who purchased company shares before the contract award was publicly disseminated was held to have traded while in possession of unpublished price sensitive information. The information that the tender process had reached its final stage, with only the award remaining, was not public to ordinary shareholders, and dissemination occurred only later. On those facts, the insider trading prohibition was breached because the decisive question was whether the trader had unpublished price sensitive information at the time of dealing. The finding of violation was upheld.

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Issues: Whether the appellant, being a director and connected person, traded in the company's shares while in possession of unpublished price sensitive information and thereby violated the prohibition against insider trading.

Analysis: The appellant was a director and therefore an insider within the meaning of the regulations. He purchased shares before the award of the contract was made public through the stock exchanges. The information that the tender process had reached the final stage and only the award remained was not public information from the perspective of ordinary shareholders. The definition of unpublished information turns on whether the information has been published by the company or its agents, and dissemination occurred only later. The reasoning adopted by the adjudicating officer could be sustained on the facts even if one of the stated grounds was not accepted, because the decisive question was whether the appellant traded while possessing unpublished price sensitive information.

Conclusion: The appellant was guilty of insider trading and the finding of violation was upheld against the appellant.

Ratio Decidendi: A director who trades in the company's securities before material information is publicly disseminated acts in breach of insider trading prohibitions if he is in possession of unpublished price sensitive information, even where the information is at an advanced stage of disclosure but not yet made public.

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