The Telegraph
Since 1st March, 1999
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Sebi weighs prosecution against Pendse

Mumbai, Sept. 27 (PTI): The Securities and Exchange Board of India may initiate prosecution proceedings or adjudication against former Tata Finance Ltd (TFL) managing director Dilip Pendse and associates for alleged violation of Sebiís insider trading regulations involving sale of TFL shares.

The chairman has powers to begin a prosecution based on the gravity of violations, Sebi sources said here today.

The capital market regulator also has the option to initiate adjudication proceedings by issuing showcause notice in TFL case and later the Sebi board could pass an order, sources said adding, it was yet to decide on further course of action.

The Sebi probe into charges of insider trading in TFL stock revealed that Pendse, being an insider and in possession of unpublished price sensitive data, had communicated information about impending results of TFL to his wife Anuradha Pendse and acquaintance Anjali Beke.

These two persons, while in receipt of information, sold TFL shares in their own names and that of their companiesóNalini Properties Pvt Ltd and Anjudi Properties Pvt Ltd, Sebi said.

The dealing in 2.9 lakh TFL shares was in violation of Sebiís insider trading norms, it said.

The market regulator had initiated a probe, following a complaint by TFL alleging various irregularities and violations committed by Dilip Pendse relating to disclosure in the offer document dated March 20, 2001 for rights issue of TFL preference shares. The off-market transaction for 2.9 lakh TFL shares actually happened during March 28-30 2001 and not during September 11-13, 2000 as contended, Sebi report said.

The brokers Jhunjhunwala and Malani Sanghavi gave undated contracts to the sellers Anuradha Pendse, Nalini Properties, Anjudi Properties and Anjali Beke, it said.

The Sebi report said the brokers in turn issued the contracts to ultimate buyers India Emerging and Sarjan Securities.

The back dating and falsification of contract notes, bills and books of accounts was with a view to creating an illusion that the transactions of purchase and sale of shares of TFL had taken place during September 2000, when it had actually taken place during March 2001, Sebi pointed out.

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