The Supreme Court on Monday sought reply from market regulator Sebi on an appeal filed by VK Kaul, a former independent director at Ranbaxy, and his wife Bala Kaul, accused of insider trading charges.
A Bench headed by Justice SS Nijjar issued notice to Sebi on appeals filed by Kauls.
They have challenged the Securities Appellate Tribunal's (SAT) October order that upheld market regulator Sebi's decision to impose a penalty of R50 lakh on VK Kaul — who was a non-executive independent director of Ranbaxy Laboratories between January 2007 and December 2008 — and a fine of R10 lakh on his wife Bala Kaul.
The regulator had alleged that Kaul knew in advance that Ranbaxy's arm Solrex was going to buy shares of Orchid Chemicals and had traded on behalf of his wife ahead of the transaction based on unpublished price-sensitive information (UPSI).
Holding Kaul's guilty of violating Section 12A(d) and (e) of the Act, the market watchdog had said that the decision of Solrex to purchase shares of Orchid Chemicals was price-sensitive information known only to the insiders.