TaxTMI 
TaxTMI 
2012 (1) TMI 350
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....e, in brief, are that the Board conducted investigations into the rise in price and volume in the scrip of M/s. Rasi Electrodes Ltd. (the Company) during the period from June 8, 2007 to July 20, 2007. The scrip of the company is listed on the Bombay Stock Exchange Ltd. It was noted that certain promoter entities had traded in the scrip during the investigation period. It was further noticed by the Board that the agenda for the board meeting to be held on June 30, 2007 was discussed internally between Mr. B Popatlal Kothari, chairman and managing director and Mr. G Mahavirchand Kochar, whole time director of the company. The agenda was finalized between June 19 to 21, 2007. The rate of dividend was finalized in the meeting held on June 30, 2007. The period of June 19 to 30, 2007 was considered as a period when the information about the financial results and dividend was unpublished price sensitive information. It was further noted by the Board that the agenda for the board meeting regarding bonus issue to be held on July 25, 2007 was discussed internally during the period July 15 to 17, 2007 and the agenda papers were circulated on July 17, 2007. The period July 15 to 17, 2007 was c....
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.... 14 05/07/2007 200 6378 31.89 15 6/7/2007 600 19700 32.83 06/07/2007 1211 39383 32.52 16 07/07/2007 150 4908 32.72 13/7/2007 2000 86000 43 16/7/2007 150 6683 44.55 16/72007 2000 95000 47.5 17 17/7/2007 2000 97000 48.5 17/7/2007 4250 215450 50.69412 18 18/7/2007 5000 284500 56.90 19 19/7/2007 3600 221415 61.50 19/7/2007 9466 591830 62.52 20 20/7/2007 8000 494700 61.84 20/7/2007 1473 91031 61.80 Total 24484 1149329 46.94 30610 1506648 49.22 It was observed that the appellant is wife of Uttam Kumar Kothari who is the promoter of the company and is brother of B Popatlal Kothari, chairman and managing director and Ranjit Kumar Kothari, director of the company. Therefore, according to the Board, the appellant was deemed to be a connected person with the company and its directors who....
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....rs to the stock exchanges furnished in terms of regulation 8(3) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Since Mr. Uttam Kumar Kothari, brother of the chairman and managing director of the company and husband of the appellant, ceased to be promoter of the company in 2005, he was only a shareholder of the company and had no information about the day to day working of the company. Therefore, his wife, the appellant before us, cannot be said to be a person "deemed to be a connected person". Regarding residential address of her husband and chairman and managing director of the company, it was submitted that the address of the appellant is different from that of the chairman and managing director of the company. They stay in different apartments constructed on the same plot which has been mistaken as same address. It was further submitted that the appellant's trades were independent of the corporate announcements and were never induced / driven by the said corporate announcement. The appellant was trading in the ordinary course according to her own commercial wisdom prior to the corporate announcements, during ....
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....istrar to an issue, debenture trustee, broker, portfolio manager, Investment Advisor, sub-broker, Investment Company or an employee thereof, or, is member of the Board of Trustees of a mutual fund or a member of the Board of Directors of the Asset Management Company of a mutual fund or is an employee thereof who has a fiduciary relationship with the company; (iv) is a Member of the Board of Directors, or an employee, of a public financial institution as defined in section 4A of the Companies Act, 1956; (v) is an official or an employee of a Self-regulatory Organisation recognised or authorised by the Board of a regulatory body; (vi) is a relative of any of the aforementioned persons; (vii) is a banker of the company. (viii) relatives of the connected person; or (ix) is a concern, firm, trust, Hindu undivided family, company or association of persons wherein any of the connected persons mentioned in sub-clause (i) of clause (c), of this regulation or any of the persons mentioned in sub-clause (vi), (vii) or (viii) of this clause have more than 10 per cent of the holding or interest; (ha) "price sensitive information" mea....
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....tion with regard to declaration of financial results, dividend and bonus was price sensitive information. However, he vehemently argued that to prove the charge under regulation 3, it must be brought on record that the appellant traded on the basis of unpublished price sensitive information. According to the learned counsel for the appellant, there is no material whatsoever brought on record by the adjudicating officer to show that the appellant traded on the basis of price sensitive information. 7. We have given our thoughtful consideration to the provisions of the regulations and to the facts of the case and are inclined to agree with learned counsel for the appellant that his case stands on a different footing as compared to the three cases disposed of by this Tribunal in the case of Ranjana R Kothari, referred to above and that the appellant has not traded on the basis of unpublished price sensitive information. The prohibition contained in regulation 3 of the regulations apply only when an insider trades or deals in securities on the basis of any unpublished price sensitive information and not otherwise. It means that the trades executed should be motivated by the informati....