Sebi charges former director of Manappuram Finance for violating insider trading rules

The Securities and Exchange Board of India( Sebi ) has charged A R Sankaranarayanan,a former independent director of Manappuram Finance for alleged violation of insider trading rules.The regulator said Sankaranarayanan had not obtained pre-clerance from the non-banking finance company for trades done by his wife in the company's shares. It has imposed a monetary penalty of Rs 1000000 on him.Sebi said it had conducted investigation into the alleged irregularities in the trading in the shares of Manappuram Finance on the background of the Reserve Bank on February 6,2012 restraining the company from accepting or renewing public deposits.On February 7,2012, the stock price of the company declined by 19.95% from its previous day closing price.Sarada Sankaranarayanan,wife of the director had traded in the shares of Manappuram on both the days (Feb 6 and 7,2012).The counsel for Mr Sankaranarayanan argued before Sebi that the shares were sold by his wife who is economically independent and hence pre-clearance was not required.Also,he had discussed his intention to sell the shares in the board meeting of Manapuram held on February 2,2012 and the board had no objection for the same.He has also got a letter from one Dr Manoharan another board director on the same."This argument of the Noticee does not inspire confidence," the regulator said in an order posted on its website.Sebi said" Wife of the Noticee(Sankaranarayanan) has sold 1363165 shares for Rs. 70,417,591/-. Hence in the instant case, the number of shares transacted and also the value of transaction exceeded the threshold limit for obtaining pre-clearance of trades."The threshold limit for obtaining pre-clearance is the least of the following such as Rs 25,00,000 in value,25,000 shares of 1% of share capital of the company.