SEBI had slapped a fine of Rs 1 crore on the former Adlabs man for alleged insider trading
The Securities and Exchange Board of India (SEBI) had charged Manmohan Shetty, former MD, Adlabs Films, of insider trading on June 13. The regulatory body had slapped a fine of Rs 1 crore on him. Shetty has now been cleared of the offence after he appealed to the Securities Appellate Tribunal (SAT).
A statement by Shetty’s PR said, “Manmohan Shetty’s impeccable record and character is one of the primary reasons that the man is so well respected in the entertainment industry. Building a conglomerate was always bound to be an uphill task, but to do so with the honesty and attitude shown by Mr. Shetty over the course of the past few decades makes his achievements even more commendable. Back in 2006, the Securities and Exchange Board of India (SEBI) charged Manmohan Shetty, the former managing director of Adlabs Films, with insider trading for selling shares of his firm in violation of rules while fining him Rs 1 crore for the offence. Mr. Shetty had appealed to the Securities Appellate Tribunal (SAT) and contended that the sale was not based on any insider information since the decision of the Board had already been sent to the Stock exchanges and was disseminated on the website of the stock exchanges. It was further submitted that the sale of shares before expiry of 24 hours of the outcome of the Board meeting being made public was purely an inadvertent and technical error. After analyzing the entire case, SAT recently ruled that Mr Shetty did not violate any insider trading regulations but did violate the code of conduct, formulated by the company, by selling shares during the period when trading window was closed. In accordance with the ruling, the fine was reduced to Rs 25 lacs with SAT accepting Mr. Shetty’s contention of the transaction being a technical error, without any mala fide intention. The judgment brought the entire saga to a fitting conclusion with Manmohan Shetty cleared of any wrongdoing.”