A Vellayan, chairman of the Chennai-based Murugappa group, who was charged with insider trading by market regulator Securities and Exchange Board of India (Sebi), has stepped down from chairmanship of the group and its subisidiaries.
“In keeping with family values and tradition, he has stepped aside from the chairmanship of the Murugappa Group Corporate Board and of Coromandel International and EID Parry India until this matter is resolved,” Murugappa group said in a statement.
Sebi had on Thursday charged Vellayan and three other individuals with insider trading. The regulator had alleged that Vellayan had passed on unpublished, price-sensitive information pertaining to the acquisition of Sabero Organic Gujarat by group entity Coromandel International to some individuals who traded in the shares of Sabero on the basis of that information.
The statement said the Sebi order linking Vellayan to trades by two individuals in shares of Sabero Organics Gujarat was based merely on suspicion and a far- fetched tenuous conjecture. The only purported link sought to be made by Sebi between Vellayan and these transactions is that AR Murugappan, a distant relative (son of a grandaunt), had a property transaction with Vellayan way before the Sabero transaction was even thought about.
Sebi has jumped to the conclusion that the trades could potentially be attributed to suspect communication of unpublished price-sensitive information about the Sabero deal by Vellayan to this distant relative, it said. The link drawn in this interim order is not a conclusive finding. Vellayan is resolute in defending the serious harm to reputation caused by this order and will take appropriate action as legally advised. He is keen to also demonstrate bona fides and will extend full cooperation to Sebi to complete investigations expeditiously, apart from seeking redress against the premature measures adopted, the statement added.