Chennai: Lack of evidence to prove the involvement of Murugappa Group Executive Chairman, A Vellayan, in the exchange of sensitive information has led to his vindication by the Securities and Exchange Board of India (SEBI.)
Last year, the regulator had passed an ex-parte order on the basis of prima facie suspicion about purchases of Sabero Organics Gujarat Ltd shares by some people ahead of the announcement only to sell the shares right after the announcement.
According to Murugappa Group, after conducting personal hearing in the matter, it was found that there was no material evidence, which could lead to the conclusion that any of the suspected entities (except Gopalakrishnan and Karuppiah) could be connected to the people privy to the Unpublished Price Sensitive Information (UPSI).
"On the basis of the findings of the investigation, it is difficult to arrive at a conclusion as to who exactly passed the information to Murugappan and thereby to Gopalakrishnan and Karuppiah," the latest order states.
"As many as sixty-nine people/entities had access to the UPSI during the Investigation Period. The SCN alleges Vellayan's relationship with Murugappan as the key evidence to indicate the flow of information from Vellayan to Murugappan and in turn to Karuppiah and Gopalakrishnan. However, there is no supporting evidence to arrive at the conclusion that the UPSI was passed by Vellayan to Murugappan and by Murugappan to Gopalakrishnan and Karuppiah-HUF who traded in the shares." Vellayan had stepped aside from chairmanship of the group until an internal review looked into the allegations of SEBI last year, which had been made without a hearing, and on a prima facie basis.
