Sebi disposes of case against Shelter Infra directors

Market regulator Sebi has disposed of case against seven directors of Shelter Infra Projects for alleged non-compliance with the model code of conduct under the insider trading norms.Securities and Exchange Board of India (Sebi) has dismissed the charges against -- Sisir Kumar Saha, Chinmoy Mazumdar, Koushik Roy, Dibakar Chaterjee, Asmanja Mitra, Mahiruha Mukherji and Chirantan Mukherjee -- as it found the evidences against them to be "insufficient"."...the alleged violations against the noticee nos. 2 to 8 (the 7 directors) does not stand established and is not a fit case to impose any monetary penalty," Sebi said in its order dated June 28.Besides the regulator has also "abated" the proceedings against Shelter Infra compliance officer , late K L Surana."...noticee no. 1 (Surana) against whom the proceeding was initiated expired on May 17, 2010 and is no more alive to face the penalty," the regulator said."In light of the above...the proceeding against noticee no.1 is liable to be abated without going into the merit of the case," it added.Sebi had conducted a probe into the alleged irregularity in the shares of Shelter Infra and into the possible violations of its norms between April 1-September 22, 2009.The investigation revealed that the board of directors of Shelter Infra approved a 'Shares Purchase Agreement' in July 2009 and in that regard had made a public announcement to the company's shareholders.As per code of conduct framed in terms of insider trading norms, the trading window of the company has to remain closed during the period of the public announcement of periodical financial results and such other sensitive information.However, it was alleged that Shelter Infra had not introduced any trading window during the public announcement.It was also alleged that Surana as a compliance officer had not informed the persons/ entities who are subjected to the window closure and that the directors had failed to monitor the implementation of the code of conduct."A formal communication indicating the trading window to be closed ought to have been made before the public announcement by the Compliance Officer," Sebi said.Meanwhile, the regulator observed that law does not envisage the directors to monitor and supervise the day to day functioning of the compliance department of the company."The substantive corroborative evidences as available on record are insufficient to establish beyond doubt that noticee nos 2 to 8 (directors) had done or not done anything with regard to trading window closure in connection with the public announcement which is in contravention of any provisions of the law," the regulator said.