New Delhi, Jan 28 (PTI) Markets regulator Sebi has slapped a penalty of Rs 42 lakh on a director of Acclaim Industries for violating insider trading norms. Also Read - Govt Allows Operation of Electricity Futures in India

According to Sebi, Abhishek Mehta was managing director and promoter of the firm at the time of violation. Also Read - CBDT Signs MoU With SEBI For Data Exchange

In an order, the regulator said it conducted a probe from January to December 2012 regarding the change in the shareholding of Mehta after the company’s board principally approved the proposal of merger of the firm with Database Software Technology Pvt Ltd (DSTPL) in January 2012. Also Read - SEBI Allows Promoters to Increase Stake by up to 10%

During the examination, Sebi observed that in February, the board decided not to merge the firm with DSTPL. However, the decision was not informed to the exchange.

Moreover, in August, the firm informed exchange that a meeting will be scheduled for share exchange ratio and scheme of amalgamation regarding the merger with DSTPL.

The information was misleading as the decision of cancellation of merger was already taken in the earlier months, Sebi said.

Regarding Mehta, the regulator said being managing director of the firm, he made misleading announcements and had knowledge of company’s decision of cancellation of merger.

Besides, by selling shares and reducing his shareholding, Mehta was trading when in possession of UPSI (unpublished sensitive information), Sebi said in an order dated January 25.

By trading when in possession of UPSI, Mehta contravened PIT (Prohibition of Insider Trading) regulations, Securities and Exchange Board of India (Sebi) said, and thereby imposed fine on him.

This is published unedited from the PTI feed.