"After considering all the facts and circumstances of the case and material made available on record, it is concluded that the alleged violation... of the PIT (Prohibition of Insider Trading) Regulations could not be established against the noticees (Tech Mahindra, Mahesh N, Puneet Virender, Syed Tanvir Hussain and Sanjeev Parida )," Sebi said in an order.
The regulator had received information from the compliance officer of Tech Mahindra through a letter in September 2013, stating that five employees sold shares in excess of the threshold prescribed by the company.
On receipt of the information, Sebi examined the matter for possible violations of PIT Regulations and found that four employees -- Mahesh N, Puneet Virender Kumar, Syed Tanvir Hussain and Sanjeev Parida -- had sold shares on stock exchanges in August, 2013.
Based on findings of the examination, it was alleged that the four individuals were the 'officer' as prescribed under the PIT Regulations, and being so, failed to make necessary disclosure regarding the change in their shareholding.
Another allegation was that Tech Mahindra received disclosures from three officers -- Sanjeev Parida, Mahesh N and Syed Tanveer Hussain -- for the change in their shareholding but failed to make disclosure to the stock exchanges.
In the order, Sebi noted that under PIT Regulations 'officer' includes any director, manager or secretary or any person in accordance with whose directions or instructions the board of directors or any one or more of the directors is or are accustomed to act.
With regard to the submissions made by Tech Mahindra, the regulator noted that none of the immediate reporting managers of the four employees was director of the company.
Further, no credible information is available on record confirming that under direction or instruction of the four employees, the board of directors or any one or more directors of Tech Mahindra were accustomed to act, Sebi said.
With regard to the violation by Tech Mahindra, Sebi said in scenario when the company did not receive disclosures for the change in the shareholding of Sanjeev Parida, Mahesh N and Syed Tanveer Hussain under Regulation 13 of PIT norms, there is no liability on the firm's part to disclose the same to stock exchanges.
Regulation 13 relates to disclosure of shares or voting rights to the company as well as the stock exchanges.
In a separate order, the regulator also imposed a total penalty of Rs 4 lakh on Varun Industries and three others for disclosure lapses.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)