The Securities & Exchange Board of India (SEBI) has held the Chairman and Managing Director of Polaris Software Labs (now Polaris Financial Technologies Ltd.) Arun Jain guilty of insider trading, and banned him from the stock market and prohibited him from dealing with shares for two years.
The insider trading case involving 15,080 Polaris shares dates back to 2000 when Polaris, after due diligence, called off the proposed acquisition of Data Inc of the U.S. in the second week of September, 2000, but had belatedly informed the stock exchanges on September 30, 2000.
“During the investigations, it was observed that the company had deliberately withheld this (proposed acquisition) price sensitive information from the public domain,” SEBI said.
When the company disclosed the above information to the stock exchanges on September 30, 2000, there was a decline in the price of its shares. From Rs.545 on September 29, the scrip went down to as low as Rs.390 on October 23.
“Considering the facts and circumstances of this case, seriousness of violations and the above mitigating factors…….I, hereby restrain Mr. Arun Jain from accessing the securities market and further prohibit him from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner for a period of two years from the date of this order,” said SEBI wholetime member Rajiv Kumar Agarwal while delivering the order on Tuesday.
This order has come into force with immediate effect.
SEBI said Mr. Jain dealt with the company’s shares on behalf of Polaris Holding Private Ltd. (PHPL) held by him, and had made unfair gains to the tune of Rs.27.26 lakh.
