In a recent ruling1, the Hon'ble Securities
Appellate Tribunal ("SAT") has absolved a company and its
compliance officer for wrongful disclosure made to the stock
exchanges. The ruling was based on the argument that the
misinformation originated from a Key Managerial Personnel (KMP)
within the company.
The matter also concerned an allegation against the KMP for
trading when in possession of Unpublished Price Sensitive
Information ("UPSI"). The UPSI in question was the
financial results for the quarter ending 31 March 2016. Also in
contention was the date on which the alleged UPSI came into
existence.
Summary
The KMP was the Managing Director (MD) of the company and an
'insider'. He transferred shares of the company on 04 May
2016 to another entity, for which he received consideration almost
a year later. He disclosed this to the company and the compliance
officer on 09 May 2016 as an encumbrance upon these shares and not
a sale, and consequently a disclosure
