Sebi imposes Rs 10 lakh fine on 3 senior officials of Omkar Overseas

Markets regulator Sebi today imposed a total fine of Rs 10 lakh on three senior officials of textile firm Omkar Overseas Ltd for disclosure lapses.

According to a Sebi order, the officials are Champalal Gopiram Agarwal (Chairman and Managing Director); Shankarlal Gopiram Agarwal (Director) and Subhashchandra Omkarmal Agarwal (Director).

The ruling follows an investigation by the Securities and Exchange Board of India (Sebi) in the share trading of Omkar Overseas for the period from October 2009 to April 2010.

During the investigation period, Champalal and Shankarlal had sold more than 25,000 shares on 13 and eight occasions respectively, while Subhashchandra had disposed of over 25,000 shares five times.

Following the sale of shares, all the three officials were required to make necessary disclosures to the company as well as stock exchange as prescribed under the PIT Regulations.

However, it was alleged that they made delayed disclosures in this regard.

PIT (Prohibition of Insider Trading) Regulations require any person who is a director or an officer of a listed company to disclose any change in shareholding to the firm as well the stock exchange, if the change is over 25,000 shares, within two working days.

There were other allegations related to disclosure lapses against Champalal and Shankarlal as well.

By non-disclosing or belatedly disclosing his shareholding, Champalal has violated the provisions of PIT Regulations, Sebi said.

With regard to Shankarlal and Subhashchandra, the regulator said that both the directors have made the relevant disclosures belatedly.

Noting that the three officials have made delayed disclosure and severely impaired the integrity of the disclosure system put in place by the regulator, Sebi said that their "actions warrant the imposition of penalty".

Accordingly, the regulator has imposed a total penalty of Rs 10 lakh on Champalal, Shankarlal and Subhashchandra.