Markets regulator Sebi on Thursday disposed of a matter against IDFC Asset Management Company and BNP Paribas Asset Management which alleged that the firms indulged in insider trading while dealing in Manappuram Finance Ltd's (MFL) scrip.
Sebi, pursuant to an investigation in the matter of selective disclosure of unpublished price sensitive information (UPSI) by Manappuram Finance, observed that BNP Paribas Asset Management (I) and IDFC had sold its shares while allegedly in possession of UPSI during March 1-20, 2013.
Sebi noted that officials of MFL met with Ambit Capital Pvt Ltd's research analysts on March 18, 2013 to seek market guidance about the quarterly results and future outlook. Ambit published a research report based on the meeting which was distributed to its clients (broking as well as research) on March 19, 2013 before the market opening hours.
In the research report, Ambit had changed its rating of MFL's stock from "buy" to "under review."
The information of negative profit for the fourth quarter of FY 2012-13, which is deemed to be price sensitive information, was disclosed to the stock exchanges by MFL on March 20, 2013 after market hours and the information was already in the public domain before that.
Sebi said the asset management companies were not in a position to know that the information that was distributed in the research report or discussed in the conference call or being covered by media is UPSI.
The transactions of the asset management companies was purely from the point of view of the unit holders in the mutual fund and selling of the scrip of MFL during that time was necessary to avoid significant loss to the unit holders in the scheme since the price of the scrip was rapidly falling after the research report was issued in the morning of March 19, 2013, it added.
"After considering all the facts and circumstances of the case, the material available on record and the submission made by the Noticee ..., I hereby dispose of the SCN (show cause notice) in the matter without any penalty," adjudicating officer Vijayant Kumar Verma said in similarly worded separate orders.
As per the orders, noticee refers to the asset management companies.
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