Mumbai, Aug 17: Hindustan Lever Ltd (HLL) has requested SEBI for more time to respond to its allegations on insider trading. SEBI had communicated its findings to the company on August 4, giving it two weeks' time to reply before deciding on the future course of action.

According to company sources, HLL will take some more time before replying to the allegations. However, the reasons for the delay and exact date of submitting its response are not known. SEBI officials were unavailable for comment.

Sebi had on August 4 shot off a letter to the company and its directors seeking an explanation on the purchase of eight lakh shares of Brooke Bond Lipton two weeks before the merger with HLL.

Subsequently, HLL had categorically denied that there was any question of insider trading involved. It said that the company was a primary party to the merger and hence could not be termed an insider. It is not clear why the company has sought more time for a reply, since earlier, HLL chairman Keki B Dadiseth, had said that the company would respond to the SEBI communique in a fortnight.

In case HLL's reply to SEBI's `communication of findings' is not considered satisfactory, the action could include either adjudication or even legal prosecution in the case of the individuals concerned.

Former chairman of HLL SM Datta, who was also sent a communication on the findings since he was the chairman of HLL at the time of the Brooke Bond share purchase, has also asked for more time to reply to the SEBI note. HLL decided to acquire BBLIL's shares to avoid a dilution of Unilever's stake in the merged entity. Prior to the merger, Unilever's direct stake in BBLIL was less that 51 per cent (50.2 per cent).

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