Sebi asked to pay ₹5 lakh for failing to unfreeze Kirloskar shares
Atul and Rahul Kirloskar faction, the Securities Appellate Tribunal (SAT) on Monday directed the markets regulator to pay ₹5 lakh for failing to unfreeze their shares in Kirloskar Industries Ltd. In October 2020, two Kirloskar Brothers—Atul and Rahul Kirloskar—were penalized by Sebi through two separate orders, alleging insider trading in shares of Kirloskar Brothers Ltd (KBL).
On the other hand, Kirloskar Industries Ltd (KIL) was facing charges for failing to adhere to listing regulations. Under these orders, the Securities and Exchange Board of India (Sebi) restrained the three Kirloskar brothers from accessing the capital market for a specified period.
The order was then challenged by the Kirloskars before the Securities Appellate Tribunal seeking a stay on the effect and operation of the order. KIL is controlled by younger brothers Atul and Rahul Kirloskar, while Kirloskar Brothers Ltd is majority owned by Sanjay Kirloskar who was also penalized under a separate order for alleged violation of insider trading norms.
“We direct Sebi to pay (a) cost of ₹5 lakh to be deposited before the registrar of this tribunal within two weeks from today. In the event, Sebi finds that the fault lay with NSDL, it will be open to them to take appropriate remedial measures against NSDL," said justice Tarun Agarwala in his order on Monday.
Making some serious observations against the regulator, justice Agarwala said that “due to the market regulator's lackadaisical approach the interest of the investors suffered". In December 2020, while granting relief to Kirloskar brothers, SAT had stayed the effect and operation of the Sebi order, subject to an undertaking to be provided by the Kirloskar brothers that they would not sell the shares of
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