labels: hindustan lever, sebi
Court summons to HLL for insider tradingnews
Our Corporate Bureau
17 September 2002

Mumbai: The metropolitan magistrates court here has issued summons to Hindustan Lever Ltd (HLL) and its directors in a criminal complaint filed by the Securities and Exchange Board of India (Sebi) in 1998 for alleged insider trading by them prior to the merger of Brooke Bond India with HLL.

Sebi had approached the Bombay High Court a month ago complaining of inordinate and abnormal delay by the magistrate taking cognisance of the case. The magistrate has not taken a decision in the matter for more than three years. The matter continues to be adjourned for the last three years.

Now, the Bombay High Court has directed the metropolitan magistrate to proceed with the case without delay. It is following this that the metropolitan magistrate issued summons to the company and its directors.

The five HLL directors who were originally named in the case are S M Datta, M Dadiseth, R Gopalakrishnan, M K Sharma and A Lahiri. Some of them are no longer with HLL.

Confirming the summons, HLL says the summons has been obtained by Sebi without bringing to the courts notice the material portion of the appellate authoritys order. (The appellate authority, constituted by the ministry of finance, had quashed Sebis original order which accused HLL of insider trading).

In a press release, HLL quoted the appellate authoritys order of July 1998: We hold that Sebi was most unjustified in ordering prosecution of the appellants (HLL). This portion of the appellate authoritys order was also not stayed by the Mumbai High Court in its interim order of September 1998.

HLL had wanted to bring it to the notice of the magistrate that Sebi had filed the complaint in disregard of the appellate authoritys order and without bringing it to the notice of the court that Sebis order had been quashed. HLL, therefore, made an application to the magistrate that summons should not be issued before the company is heard.

However, the Bombay High Court had, on 3 September 2002, quashed this application on the ground that the company could not be heard before summons is issued.

 

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Court summons to HLL for insider trading