Insider Trading: SEBI penalizes Ajoy Chawla, Executive, Titan Company

Insider Trading: SEBI penalizes Ajoy Chawla, Executive, Titan Company

The Securities and Exchange Board of India (SEBI) after receiving a complaint dated November 13, 2018 from Titan Company Limited, listed on BSE limited and National Stock Exchange of India Ltd. ('NSE'), initiated that the designated employee of the company viz. Mr. Ajoy Chawla had contravened the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 PIT Regulations, 2015). A preliminary was conducted.

The capital market regulator directed Mr. Chawla to pay a settlement amount of Rs. 30,44,063/- which the latter agreed to and, through an e-mail dated 6th October, communicated the payment details to SEBI, it said in its order.

The SEBI after examination had observed that Mr. Ajoy Chawla had traded in the scrip of the company on three trading days and executed contra trades, when the trading window was closed. The contra trades executed by Mr. Ajoy Chawla were in excess of Rs. 10 lakhs executed during calendar quarter period September 19, 2018 to September 24, 2018.

Mr. Ajoy Chawla did not make necessary disclosures for trades executed in excess of Rs. 10 lakhs during calendar quarter period September 19, 2018 to September 24, 2018. As per Clause 4 of Schedule B read with Regulation 9(1) of SEBI (PIT) Regulations, 2015, designated persons and their immediate relatives shall not trade in securities when the trading window is closed. Further, as per Clause 10 of Schedule B read with Regulation 9(1) of SEBI (PIT) Regulations, 2015, the code of conduct shall specify the period, which in any event shall not be less than six months, within which a designated person who is permitted to trade shall not execute a contra trade.

In light of the above facts, SEBI observed that Mr. Ajoy Chawla had violated Clauses 4 & 10 of Code of Conduct given under Schedule B prescribing Minimum Standards for Code of Conduct to Regulate, Monitor and Report Trading by Insiders read with Regulation 9(1) of PIT Regulations 2015. Further according to SEBI the order shall come into force with immediate effect.

"In terms of Regulation 28 of the Settlement Regulations, the order is without prejudice to the right of SEBI to take any enforcement action including restoring or initiating the proceedings in respect to which this settlement order is passed if Mr Chawla fails to comply with the settlement order or at any time after the settlement order is passed or has not made full and true disclosure or has violated the undertakings or waivers. In such a case, the settlement order shall stand revoked and withdrawn and the board shall restore or initiate the proceedings." SEBI stated.