It may be concluded that by virtue of RPIL having control over IPCL, it was reasonably expected to have access to unpublished price sensitive information of IPCL. RPIL being the promoter having control over the company holding 46 per cent shares of IPCL is inherently expected to have access to price sensitive information. The company being in such a position it is unacceptable that it was not aware of such major/ important decisions of the company IPCL, the Sebi order said.
Share price of IPCL on March 5, 2007, declined by 8.13 per cent on the BSE when the Sensex declined by 3.79 per cent. However, in a divergence from the index, the scrip witnessed substantial price gain on March 8, 2007, and March 9, 2007, subsequent to the announcement of amalgamation of IPCL with Reliance Industries.
The findings of the investigation led to the allegation that RPIL was in the possession of unpublished price sensitive information while trading in the scrip of IPCL prior to announcement of declaration of interim dividend and amalgamation of IPCL with Reliance Industries which resulted in violation of regulation 3 of SEBI (Prohibition of Insider Trading) Regulations, 1992.