SEBI orders attachment of Ranbaxy ex-director, wife's assets
27 June 2014
The Securities and Exchange Board of India (SEBI) has ordered the attachment of bank accounts and security possessions of a former director of Ranbaxy Laboratories and his wife in a matter related to alleged insider trading by the duo in Orchid Chemicals & Pharmaceuticals Ltd shares.
The capital market regulator is demanding dues worth Rs77.83 lakh from them, after having recovered Rs64.85 lakh from Ranbaxy's former independent director V K Kaul and Rs12.97 lakh from his wife Bala Kaul.
The dues include penalties of Rs50 lakh and Rs10 lakh imposed by SEBI on Kaul and his wife in January 2012.
In attachment orders dated 25 June, SEBI has asked the banks concerned to attach all accounts, including lockers held by the couple.
The regulator has also directed depositories NSDL and CDSL to attach all the demat accounts of the two defaulters.
SEBI told the banks and the depositories that there was "sufficient reason" to believe that defaulters may dispose of the amounts in the accounts and "realisation of amount due under the certificate would in consequence be delayed or obstructed".
It has ordered banks and depositories to attach "all accounts by whatever name called of the defaulter, either singly or jointly with any other persons".
It has also asked banks to attach the lockers held by the entities as well as "all other amount/proceeds due or may become due to the defaulters or any other money held or may subsequently hold for or on account of defaulter".
SEBI has further ordered the banks and the depositories that no debit would be made in these accounts until further directions. However, the credits, if any, into the account would be allowed.
The scrip of Orchid Chemicals saw a huge fall in the last half of March 2008, but then recovered significantly.
Several alerts were generated at National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), and the scrip was taken up for joint investigation by the bourses on the basis of which a report was submitted by them in April that year.
Bala Kaul had bought several shares in the company toward the end of March 2008, just prior to the start of share buying by Solrex, a Ranbaxy holding company, on 31 March 2008.
It was found that V K Kaul being a connected person of Ranbaxy Laboratories had traded on behalf of his wife in the Orchid Chemical's scrip based on unpublished price sensitive information.