The appeal for a higher compensation has been made by UTI to the appellate authority in the finance ministry which is scheduled to take up the Sebi verdict which has held HLL guilty of insider trading.

The Sebi has charged HLL for having bought a chunk of eight lakh shares of Brooke Bond Lipton India Ltd from UTI without informing it about an impending merger between the two companies.

Sebi had in its order said that the compensation to UTI could be made on the basis of four calculations. The compensation through the four set of calculations varied from Rs 3.04 crore to Rs 20.83 crore. It had opted for the lowest compensation figure.

UTI has picked up one of these calculations which amounts to compensation to the tune of Rs 7.04 crore. This had been calculated on the basis that the prices of the BBLIL scrip around the point ofthe merger had been in the vicinity of Rs 410-405 as compared to Rs 318 (excluding the premium), the price at which the deal between UTI and HLL was struck. After the announcement of the merger, the price closed at Rs 405, and even in later months, after market fluctuations, it stabilised around Rs 368. "If the difference between the market price after the announcement of merger and the market price at which the eight lakh shares were bought is taken into consideration, then the gain made or loss avoided by HLL is Rs 7.04 crore", the Sebi order had stated.

Contrary to this, the compensation of Rs 3.04 crore awarded to UTI had been based on the difference in the price at which UTI sold the eight lakh shares and the price at which it sold a subsequent chunk of shares nine months later in December, 1996.

"We have sought a compensation of Rs 7.04 crore as we feel that this is a fair figure to determine the loss suffered by us," said a top UTI official.