Disclosure default by promoter-director under insider trading rules sustained penalty for failure to inform the stock exchange

A promoter-director who purchased company shares failed to make the disclosures required to the stock exchange under the Insider Trading Regulations. The non-disclosure default under regulations 13(4), 13(4A) and 13(5) attracted penalty under section 15A(b) of the SEBI Act, and the matter was treated as identical to a connected appeal involving the same company and compliance breach. The penalty was sustained, with the reasons adopted from the companion matter.

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Issues: Whether the penalty imposed under section 15A(b) of the Securities and Exchange Board of India Act, 1992 for failure to make the required disclosures under regulations 13(4), 13(4A) and 13(5) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 was warranted.

Analysis: The appellant, a promoter-director, admittedly purchased shares of the company from time to time and did not make the disclosures required to the stock exchange. The matter was treated as identical to a connected appeal involving the same company and the same compliance default, and the penalty was upheld for the reasons already recorded in that companion matter.

Conclusion: The penalty under section 15A(b) was sustained and the appeal failed.

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