SEBI issues showcause notice to Kirloskar Brothers' promoters in connection with fraud case: Report

live bse live nse live Volume Todays L/H More × Market regulator Securities and Exchange Board of India (SEBI) has issued a showcause notice to six promoters of Kirloskar Brothers (KBL) and two others in connection with a 2010 stake sale, Mint reported. It has been conducting a probe into alleged charges of insider trading and unfair trade practices against KBL promoters. The probe relates to the sale of 10.7 million shares (13.5% stake) of KBL to Kirloskar Industries (KIL) on October 6, 2010. SEBI said the promoters are guilty of fraud against minority shareholders as they were aware of the promoter group's financial condition at the time of the stake sale. It has also assessed that the gains from the decade-old deal could be well over Rs 3500000000. SEBI has charged some of KBL's promoters with having indulged in unfair trade practices, thereby harming the interests of KIL's minority investors. Gautam Kulkarni, Rahul Kirloskar, Atul Kirloskar, Alpana Kirloskar, Jyotsna Kulkarni and Arti Kirloskar allegedly benefitted from the share sale, and have accordingly been charged by the regulator under the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) regulations, 2003.