Securities Appellate Tribunal asks Sebi to pass fresh order in ITC employee case

NEW DELHI: Setting aside Sebi order against an employee of diversified group ITC in an insider trading case, the Securities Appellate Tribunal (SAT) has directed the markets regulator to pass fresh order within six months.

The Securities and Exchange Board of India (Sebi) in an order in July 2014 had imposed a penalty of Rs 5 lakh on Chandana Ghosh head-human resource and competency development with ITC for violating provisions of Prohibition of Insider Trading (PIT) Regulations.

Following the regulator's order, Ghosh had approached the tribunal arguing that another Adjudicating Officer of Sebi had taken a contrary view in case of A K Chowdhury, who was employed as head-operations in the Education and Stationery Products Strategic Business Unit at ITC.

Sebi, in February, had dismissed allegation of insider trading against Chowdhury saying it could not be established.

The dispute in the present case relates to the decision of Sebi in holding that Ghosh working as head-Human Resource and Competency Development of Trade Marketing and Distribution at ITC is an 'officer' under Sebi PIT norms, while in the case of Chowdhury, working as Head-Operations in Education and Stationery Products Strategic Business Unit of ITC, Sebi had said that he did not fall within the category of 'officer'

"... it is just and proper to set aside the impugned order and restore the matter to the file of Adjudicating Officer Sebi for passing fresh order on merits and in accordance with law," the Tribunal noted.

"Accordingly, the impugned order dated July 7, 2014 is quashed and set aside and the Adjudicating Officer is directed to pass fresh order on merits and in accordance with law, as expeditiously as possible and in any event within a period of six months from today, after giving an opportunity of hearing to the appellant," the Tribunal said in an order dated October 9.