Markets regulator today imposed a total penalty of Rs 4 lakh on AstraZeneca Pharma India and its three former senior officials for not complying with insider trading norms.
The officials are Lars Walan, Supriya Kumar Guha and Pawan Singhal.
Walan was the managing director of AstraZeneca Pharma India from March 29, 2001 to April 1, 2004 and Guha was company secretary/compliance officer of the firm from July 1, 1999 to January 31, 2006. Singhal was the company secretary/ compliance officer of the firm from May 7, 2012 to July 31, 2014.
According to a Sebi order, the model code of conduct for prevention of insider trading that was mandated to be framed and adopted under the amendment dated February 20, 2002 to the PIT Regulations was adopted by AstraZeneca Pharma India only on February 24, 2004.
In its order, the regulator said Walan and Guha "had awareness and significant role in framing and adopting the model code of conduct and are liable for the said delay in adopting the same".
AstraZeneca Pharma India, Walan and Guha "have failed to frame, adopt and implement the code of conduct" as specified in PIT (Prevention of Insider Trading) Regulations till February 24, 2004 and violated the same, Sebi said.
On March 1, 2014, AstraZeneca Pharma India had informed the exchanges that its board of directors had received a communication from its promoter AstraZeneca Pharmaceuticals AB Sweden, proposing to make a voluntary delisting offer to the public shareholders of the firm.
As March 1 and 2, 2014 were trading holidays, the information was made public by the exchanges on March 3, 2014 before trading hours.
Noting that the information pertaining to the delisting had the effect on the price and volume of the scrip of the firm on the next trading day, Sebi said, in such a circumstance, the 24 hours prescription for closing trading window as per the norms must have been followed.
The non-closure of the trading window on March 3, 2014 was in gross violation of the model code of conduct, the regulator said.
Under the model code of conduct, among others, the compliance officer is responsible for setting forth policies, procedures, monitoring adherence to the rules for the preservation of the price sensitive information.
Being the compliance officer of the company during the concerned period, Singhal violated the model code of conduct specified under the PIT Regulations.
For the violations, the Securities and Exchange Board of India (Sebi) has imposed a penalty of Rs 1 lakh each on AstraZeneca Pharma India, Walan, Guha and Singhal.