Excerpt from Money Control Article, Published on Mar 20, 2024
Amit Manchanda, the former Vice President-Legal and Compliance Officer of Radico Khaitan, has been penalized with a Rs 5 lakh fine by the Securities and Exchange Board of India (Sebi) for breaching insider trading regulations.
Sebi’s order, issued on March 20, highlighted Manchanda’s infringement of Regulation 9(3) of the Prevention of Insider Trading (PIT) Regulations, 2015. According to the adjudicating officer, Manchanda failed in his duty to oversee trades for compliance with the company’s code of conduct and administer PIT Regulations effectively. This lapse led to a significant number of trades by designated individuals and their relatives, found to be in violation of PIT Regulation. The officer emphasized the need to safeguard investors’ interests and to serve as a deterrent against future violations by imposing a penalty commensurate with the nature of the violation.
The order revealed that other involved parties, including mid- and senior-level management and the company’s directors, have already remitted their unlawful gains to the Investor Education and Protection Fund (IEPF). They have also faced penalties from the company and have been debarred from the securities market for varying periods. Before Sebi issued its showcause notice (SCN), the company had already initiated actions against the involved parties, including penalties, remission of unlawful gains, and trading bans on Radico Khaitan’s scrip. Sebi acknowledged the company’s efforts in addressing the matter by taking both remedial and punitive measures.
In light of these actions, Sebi’s adjudicating officer found no reason to levy additional penalties on the other involved parties. Regarding the compliance failure, the order scrutinized how Manchanda violated the code of conduct under Regulation 9(3) of PIT Regulations. Manchanda attributed the oversight to factors such as misinterpretation of statutory provisions, the COVID-19 pandemic, and a code of conduct overhaul. However, Sebi deemed these explanations unacceptable, emphasizing that pandemic-induced hardships and code changes cannot justify regulatory violations.
The order noted the absence of action by the company against Manchanda for violating this particular section, further underlining the importance of strict compliance measures within corporate entities.
To delve deeper into this topic, please read the full article on Money Control.
