MUMBAI, March 13: Sebi, which has held Hindustan Lever and five directors guilty of insider trading in Brooke Bond Lipton (BBLIL) shares before the merger was formally announced, is likely to drop charges against vice-chairman R Gopalkrishnan in another case where the latter was investigated for personally buying BBLIL shares.This is evident from a close reading of Sebi's verdict in the HLL case, where it has been observed that "information about the pending merger had ceased to be non-specific" as on January 17, 1996 -- the day a Unilever representative conveyed an in-principle approval by the parent company for the merger with BBLIL.
Gopalakrishnan was being investigated for purchasing 2,500 shares of BBLIL in August 1995, several months before the merger was officially announced.According to sources, HLL was said to be guilty of insider trading because it bought shares of BBLIL after January 17, when a core committee meeting was told by Unilever representative CM Jemmett that an in-principle approvalhad been given by the Unilever board. The core committee had been set up earlier to oversee the merger modalities between the two Unilever subsidiaries.
Sebi, however, decided against prosecuting seven other directors who were party to the decision to buy BBLIL shares but were not part of the core team which had specific indications about the merger. These seven directors were: V Narayanan, MS Banga, D Bhattacharya, DM Buckle, H Munwani, SM Sahani and OP Aggarwal. These seven directors of the company were named in the "communication of findings" issued by Sebi in August 1997, on the insider trading.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
