Sebi bans Polaris promoter Arun Jain from the market for 2 years for insider trading

The Securities and Exchange Board of India has banned Polaris Software Lab Limited s promoter Arun Jain from dealing in the securities market for two years accusing him of violating insider trading norms. The case dates back to 2000 when Polaris Software was looking at acquiring US-based Data Inc. Sebi conducted investigation into the dealing in the scrip of Polaris Software Lab based on media reports that the company had after due diligence called off the proposed acquisition of Data Inc. The regulator's investigation alleged that the company had deliberately withheld this price sensitive information from the public domain. Sebi said Arun Jain by virtue of his occupying the position of chairman and managing director and promoter of the company had access to the unpublished price sensitive information(UPSI) and his dealing in the shares the company was in violation of insider trading norms. The regulator also alleged that Arun Jain by trading in the shares of the company based on the unpublished price sensitive information had made unfair gains to the tune of Rs 27.2600000. ""It is noted that the noticee had access to all information relating to the proposed acquisition of Data Inc. since the noticee, had participated in the events relating to the proposed acquisition. I, therefore, find that the said unpublished price sensitive information was known and available only to the insiders like the noticee(Jain) and not to the public,"" Sebi's whole-time member Rajeev Agarwal said in his order. Jain through his legal representative submitted to the regulator that the quantity of shares sold by him was very small as compared to his shareholding in the company. ""In my view, quantity of shares traded by indulging insider trading in scrip is immaterial for proving the charge of insider trading,"" Sebi Whole time member Rajeev Agarwal said. ""In my view, insider trading particularly by the chairman and managing director should be dealt with severely. I note that for this reason, it was contemplated to initiate multiple proceedings against the noticee in 2005,"" Sebi member said.