This is the first case of insider trading initiated by Sebi. The issue of whether HLL's officials, including its chairman KB Dadiseth, had indulged in insider trading is pending before the Mumbai high court. HLL had challenged the Sebi order before the appellate authority in the finance ministry, which turned down its order. The market regulator then went in appeal to the Mumbai high court and the court has stayed certain portions of the appellate authority order which had restricted the powers of Sebi. Sebi then filed prosecution proceedings against HLL.

In the meanwhile, more details have surfaced on Sebi's second insider trading action on ABS Industries managingdirector Rakesh Agarwal, who has been accused of having bought shares of his company before the takeover by Bayer India, on the basis of inside information on the proposed takeover.

Attempts to contact Agarwal in Vadodara proved futile as he is believed to be out of town. Sebi is yet to receive the reply from him.

Sources said that the shares were bought by two brokers, one each from the National Stock Exchange and the Bombay Stock Exchange. Interestingly, the net purchases of IP Kedia, Agarwal's brother-in-law through whom the shares were bought, were approximately 75 per cent of the net purchases of top twenty brokers at BSE and 90 per cent of the net purchases of the top ten brokers at NSE, in the ABS Industries scrip.

Investigations also revealed that Tash Investments provided Rs 1.50 crore while Agarwal contributed about Rs 1 crore towards the purchases.

Sources said that with the second case being cracked by the market regulator, the heat has now been turned on corporates to ensure greatertransparency in their dealings.