SEBI has not taken cognizance of our submission, says Gaur

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Jaiprakash Asso See previous management interviews See what other Experts & Brokerages are saying about Jaiprakash Asso Jaiprakash Asso BSE | NSE 29/05/12 Are Mutual Funds betting on Jaiprakash Asso?

Manoj Gaur, Chairman of JP Associates is not a happy man.

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

Speaking to CNBC-TV18, Gaur says, SEBI has not taken cognizance of the companies' submission. "It is unfortunate that certain inferences have been drawn on presumptions," he adds. Moreover, he states, Sameer Gaur was not part of the board and had no information.

Below is a verbatim transcript of Gaur's interview on CNBC-TV18. Also watch the attached video.

Q: Did you pass on any info to your family members? How did they get to know? And wasn't this an ethical violation?

A: Let me be very candid here that I have highest respect for the institution of SEBI. At the same time, ultimately however high and respectable an institution may be, it is made up of people, human being like us and I have no hesitation in reiterating that the learned officer has not taken cognizance of the submissions made by us during the entire hearing. It is unfortunate that certain inferences have been drawn on presumptions. One presumption is that because I'm staying with my wife and with my brothers in the same house and as the residential address is the same, I'm deemed to have shared certain UPSI (unpublished price sensitive information) with them.

I've been also working in public life for 27 yrs, I'm also part of the company and I am aware of my responsibilities. Therefore, to assume that that just because the residential address is the same I have passed on this information is absolutely false, absolutely wrong and it an injustice and has caused me a lot of hurt, which is why I'm talking to you. There is yet another presumption that certain information which was not the public domain was passed on to my wife and my brother. I have to admit that that my wife had bought 1,000 shares during the so-called closing window period.

However, she is a homemaker and not aware of what is happening in the company and of certain regulations and that may have been an error on her part, but at the same time she is not at all involved in any company matters. Sameer Gaur, my younger brother, was part of the board in 2008.  I have to tell you that he was concentrating on Formula 1, which happened last year ... he has been concentrating on Formula 1 from 2007 onwards and in 2008 he was not at all aware of when board meetings were held, of what are the company's results were going to be..To draw inferences and assume that, first, they had got information, and second , that they knew everything I think  is something which is very sad and unfortunate.

Q: You have said that the SEBI order is wrong..what part of the order is wrong? What are the frivolous inferences?

A: Well, first of all the nature of alleged UPSI  is something which I find very objectionable in case of Mrs Manoj Gaur & Mr. Sameer Gaur because as I mentioned to you, Sameer Gaur was part of the group, not part of JAL in 2008. He was working in development of  Formula 1 project.  He was not part of the board, he was not part of any management committee pertaining to JAL in 2008, so he had no information of what type of financial results are going to come because there was no forum, there was no way he could have come to know  of these numbers. Similarly, interim dividend for 2008 & 2009 - When you talk about interim dividend you have to just go back in time.

Actually ,  while JAL has been paying dividend consistently for over 12 years but we are talking of this period which is being argued pertaining to FY09. That is, September 2008 period, which falls in FY09. Four years prior to FY09, that is in 2005,06, 07 & 08, the company has been consistently giving interim dividend and coming out with final dividend, so as the company's  growth and  progression was known to everyone.

So giving interim dividend was not a first instance in that quarter, this was actually almost the fifth year when company  had been giving interim dividend, nothing new which was going to happen in that quarter. And I find it frivolous that my name has been dragged into this because we are staying in the same home. You cannot draw this inference that because we are all staying in the same home so I have passed on this information that's what I find very hurting, that's all.

Q: Given that this matter once again raises issues related to corporate governance, do you think this will impact fund raising in any manner?

A: Well, I can only say that I have the highest respect for SEBI and they are protecting the interests of shareholders and they are doing a very good job. But,  ultimately every institution consists of people and we are aggrieved by the interpretation and by the inference drawn by a person in this case. And also permit me to say I am concerned about how these highlights and headlines and the footnotes carry the info because from January 6 there is a lot of ticker going around about the interpretation of the order, because in very brief you will talk and if you don't understand in entirety the case, that is why I thought I would  explain our side of the story and that is why I am here.

I'm sure every institution has lot of good people and we are working in the interest of the country, we are working for development of infra projects and we have delivered, we have looked after shareholders' interest and I hope to get co-operation from all. Thank you.

Q: Did you and the company at any stage disclose that SEBI had issued a show cause notice on the insider trading probe? If not, why?

A: Well, at every stage the board was appraised. At the same time, I am quite sure that whatever as per requirement was to be disclosed we have disclosed. I know what analysts have to say because analyst have their own POV(point of view), like today every analyst feels that cement, infra, power all are in bad shape, this is analyst view and I can't comment on others wisdom. So, whatever has to be disclosed has been disclosed, in my opinion

Q: What are you doing to enhance corporate governance in the group?

A: Well, I am conscious that along with JAL, JP Infrapower, we have a shareholder base of almost 6 lakh shareholders. We have tried very hard to win the trust and the trust is not only by talks but by our deeds. In the last 10 years if one would recollect, JP shareholder got a return of 36% CAGR. It could have been better but for the crisis that has engulfed the entire economy and at the same time the share market. Otherwise, cement, power, infra all these sectors are very important for the country and we have delivered. Last year we delivered Karcham Wangtoo the largest private sector hydro power project of this size for the country. We delivered Formula-1.

This year we are going to commission Bina and also Yamuna express way. Even though share prices shrunk but the momentum on our projects never got affected. By the grace of God ,we are very conscious that we have to deliver what we promised and this promise we have to always uphold. At the same time corporate governance we have to discover- rediscover repeatedly. I can only assure that we are committed that this organization has to work for many decades and that can only happen on the strength of efficiency, trust and credibility and these are the cornerstone on which our company came up to this level and these are the cornerstones which are going to remain very, very dear to us.