Insider Trading: Aurobindo Pharma, its Promoters Pay Over Rs 22 Crore to SEBI as settlement

The settlement order came after the market regulator investigated the trading in the scrip of Aurobindo Pharma from July 22, 2008, to March 20, 2009, and found that Pfizer had issued a press release on March 02, 2009, and Aurobindo Pharma issued a press statement on March 03, 2009, on licensing and supply agreements entered into between them in 2008. Shares of Aurobindo Pharma shot after the announcement.

SEBI alleged that PV Ramprasad Reddy, his wife, and the three others had traded in the shares of Aurobindo based on unpublished price sensitive information. Aurobindo allegedly failed both to disclose the price-sensitive information related to the licensing and supply agreements to the bourses in violation of the listing norms and closed the trading window of the company during the UPSI period.

On September 23, SEBI had passed an adjudication order against the company and the promoters. On October 24, the AO Order was challenged before the Securities Appellate Tribunal. During the pendency of the appeal, on October 25, the company and the promoters filed a settlement application before SEBI in respect of the SAT appeal.

The settlement order by SEBI read;

"…It is hereby ordered that the pending enforcement proceedings for the alleged defaults…are settled…"

The order further added;

SEBI shall not initiate enforcement action against the applicants for the said defaults; this order disposes of the enforcement proceedings in respect of the applicants as mentioned above;