Chennai-based financial technology IT company, Polaris Financial Technology, shed 7.55 points or 5.63% at R125.85 at the closing session of the BSE after market regulator Sebi banned promoter Arun Jain from trading in securities market for two years on charges of insider trading. Order against Polaris was released by Sebi after market hours on Tuesday.
The stock hit the day?s high of R131 and day?s low of R122.65. As many as 7.51 lakh shares were traded at the counter against the two-week average of 1.13 lakh shares. The stock hit a weekly high of R138.50 and a weekly low of R122.65 and a monthly high and low of R147.30 and R122, respectively. Refuting the charges and challenging the Sebi order, the company issued a statement saying that it would appeal to the Securities Appellate Tribunal (SAT).
?The matter pertains to a twelve-year-old transaction (sale of 15,080 shares), which was settled in accordance with law and based on the recommendation of high-powered advisory Sebi committee. The settlement resulted in a consent order dated July 21, 2008, being passed after which the matter was closed. We would like to point out that the current order does not take into account the detailed legal arguments that were presented challenging the reopening of the consent order. We are reviewing the order and considering filing an appeal before SAT,? said a company statement.
Sebi had passed the suspension order against Polaris promoter after it found that Arun Jain holding 36% stake or 1.5 crore shares through Polaris Holding Private Limited in the IT company had made unfair gain to the tune of R27.26 lakh by selling 15,080 shares at a market rate of R700 each on September 19, 2000, through Allsec securities.
The proceeds of the share sale were meant fund to industrial plot buyout at Gurgaon alloted to the company by the Haryana government.
Prior to the share sale, sebi found that in early 2000, Polaris did a due diligence to buy Data Inc USA, but had dropped the acquisition plan and belatedly informed the Madras, Bombay and National stock exchanges on Sep 30 about the decision. Belated disclosure on calling off the Data inc acquisition on Sep 30 following the promoter?s 15,000-odd share sale resulted in tumbling of shares to Rs 545 on Oct 3(Sep 30 and Oct 1 2000 being Saturday and Sunday and Oct 2 being trading holiday) from the previous close of Rs 595 on Sep 29 2000.
