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Sebi bars Samir Arora for 5 years
April 01, 2004 20:05 IST
Last Updated: April 01, 2004 20:24 IST
Securities and Exchange Board of India has barred Samir Arora, fund manager of Alliance Capital Mutual Fund, from dealing in securities in any manner for five years for violating the regulator's unfair trade practices norms by indulging in insider trading.
"I hereby prohibit Arora not to buy, sell or deal in securities, in any manner, directly or indirectly, for a period of five years," Sebi whole-time member T M Nagarajan said in his March 31 order, which comes into force with immediate effect.
The mystery of Samir Arora
The period of prohibition already undergone by Arora by virtue of the interim order dated August 9, 2003 will be included in the ban period, the order said.
"However, if, in the meantime Arora desires to sell the securities, if any, currently held by him he may do so only after obtaining prior written permission of Sebi," it added.
Sebi order follows an undertaking given to the Securities Appellate Tribunal that it would pass final order by March 31.
In the course of investigations, the timing and manner of disposal of ACMF's entire holdings in Digital Globalsoft smacked of Arora's dealing in the security while in knowledge of unpublished price sensitive information. Thus, there was a prima facie case of insider trading, it said.
Further it also came to light that when Alliance Capital Management decided to sell its stake in Alliance Capital Asset Management (India), he reached an understanding with
Henderson Global Investors to purchase stake of ACM in ACAML and that his actions/inactions seemed to have been calculated to bring down the valuation of ACMF.
Sebi said it was found that the conduct of Arora was not in consonance with the high standards of integrity, fairness and professionalism expected of a fund manager.
It was also observed that, Arora being the fund manager at ACMF and FIIs/sub-accounts of ACM, was prima facie responsible for the non-disclosures and wrong disclosures.
Normally, action needs to be taken against the entity found guilty of violation of law. However, a corporate body operates and acts through its directors and other key persons in charge of its business operations, the regulator said.
It may be, essential, in appropriate cases, to lift the corporate veil and take action against the individuals, whose conduct is primarily responsible for the misconduct or violation of law by corporate body besides action against the corporate body.
Sebi has already initiated action against ACMF and its AMC under the applicable rules and regulations. In its interim order it had prohibited Arora from dealing in securities markets, until further orders.