HC stays SEBI order barring Polaris' Arun Jain from market

Madras High Court today stayed a SEBI order which had barred Polaris Financial Technology CMD Arun Jain from operating in securities market for a period of two years for alleged insider trading in the company's shares. Justice N Paul Vasanthakumar granted the stay on a petition by Jain seeking to quash the October 9 order of the Securities and Exchange Board of India.

When the matter came up for hearing, SEBI counsel sought time to file counter. The counsel for petitioner then submitted that in such circumstances, the implementation of the order may be stayed. The Judge said that in view of the above, there will be an order of interim stay and adjourned the matter to November 20.

In his petition, Jain submitted that the SEBI's impugned order was clearly "unjustified, perverse and completely devoid of substance". He said the order restrained him from accessing the securities market in relation to events that occurred nearly 12 years ago and had subjected him to undue hardship, damage to his reputation, standing and ability to conduct his business.

After a probe into the dealings of the company shares during August-September 2000, SEBI held Jain, promoter of the company, guilty of flouting norms related to insider trading. It had charged him with trading in the stock on the basis of 'unpublished price sensitive information' relating to a proposed acquisition by the firm.

SEBI had said Jain dealt in 15,080 shares of the company on behalf of Polaris Holding Private Ltd (PHPL) on the basis of 'unpublished price sensitive information' held by him and had made unfair gains to the tune of Rs 27.26 lakh.