Jaiprakash founders to challenge SEBI order

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Jaiprakash founders to challenge SEBI order

The founders of engineering and construction firm Jaiprakash Associates said they would challenge an order by SEBI, India's capital market regulator, penalising them on insider trading charges.

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The founders of engineering and construction firm Jaiprakash Associates said they would challenge an order by the Securities and Exchange Board of India (SEBI), India's capital market regulator, penalising them on insider trading charges.

SEBI imposed a penalty of Rs 10 lakh each on Manoj Gaur, chairman of the conglomerate, his wife Urvashi, and brother Sameer Gaur, as well as some company executives, for insider trading in the company's stock in 2008.

"The findings in the order are completely erroneous and contrary to factual position," Manoj Gaur said in a statement issued late on Friday.

"Aggrieved by the order, we are in the process of challenging the same before the Securities Appellate Tribunal."

CNBC-TV18 learns that two other officials of JP Associates, Haresh Vaid and SD Nailwal, were also implicated in the matter.

They also have been fined Rs 10 lakh each.

The penalty is to be deposited within 45 days of the order, SEBI said in an order dated January 5, but issued on its website on Friday.

Meanwhile, JP Associates officials have denied any such wrong doing. In fact, they went to the extent of saying that they would be challenging this SEBI order in SAT in the coming few weeks. 

Gaur in his reply to CNBC says "My attention has been drawn to an Order dated January 5, 2012 of the Adjudicating Officer, as uploaded on the site of SEBI today, imposing a monetary penalty of Rs.10 lakh each on myself, my wife and my brother for the alleged violation of Insider Trading Regulations."

He further says, "The findings in the Order relate to the purchase 1,000 shares by my wife and 7,400 shares by my brother, between October 13 to 16, 2008 (which purchase was not done based on any insider information and the said shares were not even sold). The findings in the Order are completely erroneous and contrary to factual position. It is unfortunate and we'll be challenging the same before the Securities Appellate Tribunal."

Shares of the company, valued at USD 2.2 billion, closed down 4.6% on Friday in a flat Mumbai market.

Founders, including the Gaur family, hold 46.88% stake in Jaiprakash Associates, which also has interests in hospitality, power and cement.

With inputs from Reuters