Lack Of Evidence Prompts SEBI To Revoke Insider Trading Orders Against 7 Former MCX Officials

News World India | 0
| January 7 , 2018 , 18:56 IST

Securities and Exchange Board of India (SEBI) has issued orders against seven former officials of Multi Commodity Exchange (MCX) who were accused of insider trading in August last year. However, due to lack of evidence, the Indian regulatory body has revoked its directions.

The body has claimed the total losses of  Rs. 125 crore in shares of MCX and its erstwhile promoter FTIL by alleging the violation of company's insider trading rules in the interim order by 13 people including relatives of Jignesh Shah and former top executives.

In the final order, the regulator has revoked its directions against seven persons including two former CEOs Shreekant Javalgekar and Joseph Massey, Shreekant's wife Asha Javalgekar, former NSEL CEO Anjani Sinha, ex-director Paras Ajmera, Tejal Shah (FTIL director and relative of Jignesh Shah) and Mehmood Vaid (a senior vice president at FTIL).

Many regulators and enforcement agencies have launched their probes into the National Spot Exchange Ltd (NSEL) case after the organisation suspended trading on July 31, 2013, after a major payment crisis.

SEBI will issue a separate order for Hariharan Vaidyalingam (a former director at NSEL) - the eighth person to face Sebi's interim action in MCX matter. In interim orders passed by the regulatory body on August 2, 2017, found that 13 persons "prima facie" traded in these stocks when in possession of 'unpublished price sensitive information'.

SEBI further alleged that the accused people were able to avoid any potential loss in MCX and FTIL shares and the steps impounding and retaining the loss averted by them were necessary. The seven accused then appealed before the Securities Appellate Tribunal against the directions.

Post looking at the filed objections and representations, the Tribunal asked SEBI to expeditiously pass final orders. In a 58-page final order, SEBI provided an opportunity to the affected parties to defend themselves by presenting their case, post which the regulator failed to establish any violation of insider trading rules.