NEW DELHI, AUG 7: Hindustan Lever chairman K B Dadiseth met finance secretary Montek Singh Ahluwalia on Thursday morning and appraised him of the company's position with regard to the notice slapped by the Securities and Exchange Board of India (SEBI) alledging insider trading.

The chairman seems to have followed through on his declaration in Bombay that he will take the issue to a higher forum.

In the 30-minute meeting with the secretary, Dadiseth is reported to have pleaded that purchase of shares of associate or subsidiary companies could not be interpreted as insider trading under the law. He stressed that the information on which SEBI had sent a communication of findings to HLL was voluntarily disclosed by the company. It is not known whether the HLL chief sought the finance ministry's intervention on the issue. Ahluwalia reportedly gave Dadiseth a patient hearing but made it abundantly clear that SEBI was a statutory authority which functioned autonomously and could be acting within its rights in issuing a communications of findings on insider trading to the multionational.

Well placed finance ministry sources clarified that there was little that North Block could do at this juncture. The law on insider trading was quite specific as was SEBI's action on the company. While informal lines of communications are always kept open between the ministry and the regulatory body, it is unlikely that the government, in this case, will "suggest" that SEBI should act in a particular manner.

The ministry is represented by the chief economic advisor on the board of SEBI and, officially, the issue can only be taken up at that level. But sources said that the ministry would not like to prejudge the situation and interfere with SEBI's plan of action.

The finance secretary, however, will come into the picture when a company decides to plead against a SEBI decision with the appellate authority in the ministry.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.