Sebi sets aside charges against ITC executive

Sebi today set aside the charges levelled against an ITC executive who was earlier fined Rs 5 lakh for failing to make disclosures about her shareholding after selling over Rs 35 lakh worth of the company's shares.
By an order in 2014, Sebi penalised Chandana Ghosh, head-human resource and competency development with ITC, after it found that she offloaded 10,000 shares of ITC amounting to Rs 35,27,078 on July 11, 2013 but had failed to make the disclosures on the same.
According to Sebi rules, an officer of a listed company has to disclose to that company and the stock exchanges if the change in their shareholding has exceeded Rs 5 lakh in value or 25,000 shares or 1 per cent of the total shareholding.

Ghosh, then appealed against the order to Securities Appellate Tribunal, which in 2015 set aside the adjudication order and restored the matter to the file of the Adjudication Officer of Sebi for passing a fresh order in the matter.
In additional submissions made to Sebi, Ghosh stated that the structure of the company, as set out in its Annual report, for 2012-2013, has no reference to her or even to any person at her level in the structure of the company.
She further submitted that "reference to herself as a 'manager' in her letter dated December 12, 2013 was merely with reference to the internal nomenclature assigned to the employees by the Company de hors the legal meaning and implication of the said term".

Dismissing the charges, Sebi's Adjudicating Officer D Sura Reddy said that Ghosh is holding a position which is capable of giving directions to her subordinates only and not to the Board of Directors or any of the Directors and that she is an officer in the company could not be established

"I conclude that the noticee (Ghosh) cannot be held liable for violating the provisions of Regulation 13 (4) read with Regulation 13 (5) of the PIT Regulations in as much as she cannot be said to be an "officer" of the Company within the meaning of Section 2(30) of the Companies Act, 1956," Reddy said.

"I hereby conclude that the charges levelled against the Noticee, Chandana Ghosh do not stand established and the matter is, accordingly, disposed of," he added.
The charges were levelled against Ghosh after the regulator had carried out an investigation in the scrip of ITC.