Kirloskar Brothers promoters, directors found guilty of insider trading

Mumbai, Oct 21 : The Securities and Exchange Board of India (SEBI) has found that the promoters and directors of Kirloskar Brothers Ltd (KBL) had violated norms on prohibition of insider trading as they traded in the scrip of KBL while in possession of unpublished price sensitive information and made wrongful gains by avoiding losses.
Further, the promoters and directors had also submitted an incorrect undertaking or declaration to the company.
In three separate orders in the matter, the capital markets regulator said that it had received various complaints alleging insider trading and bad corporate governance practices in KBL.
On the basis of the complaint, the SEBI conducted investigation during the period from March 1, 2010 to April 30, 2011 and examined the matter relating to dealings in the scrip of KBL. It then ascertained possible violation of norms for prohibition insider trading and prohibition of fraudulent and unfair trade practices.
Promoters Alpana R. Kirloskar, Arti Atul Kirloskar, Jyotsna Gautam Kulkarni, Rahul Chandrakant Kirloskar and Atul Chandrakant Kirloskar, along with others, have been asked to pay over Rs 31.21 crore in total, which includes both penalty and digorgement. SEBI had sent show cause notices to them in December last year.
In a separate order in the matter, the SEBI asked Sanjay Kirloskar, the Trustee of Kirloskar Brothers Ltd Employees Welfare Trust Scheme, Pratima Sanjay Kirloskar, Prakar Investments Pvt Ltd, Karad Projects and Motors Ltd to pay a total of over Rs 42.77 lakh, including penalty and disgorgement.