SEBI INFORMAL GUIDANCE- PURCHASE AND SALE OF SHARES INTER SE INSIDERS DURING CLOSURE OF TRADING WINDOW – Eshwars
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SEBI INFORMAL GUIDANCE- PURCHASE AND SALE OF SHARES INTER SE INSIDERS DURING CLOSURE OF TRADING WINDOW

Authored by Praveen Pandian

Applicant: KCP Limited.

Date of the Guidance: 08.02.2021.

Factual Background:

1. KCP Limited (hereinafter referred to as Applicant) is a Public Limited Company, whose equity shares are listed on National Stock Exchange and permitted to trade on BSE Ltd.

2. Jeypore Sugar Co Limited (hereinafter referred to as JSCL) (now in liquidation) was managed by the relatives of the promoters of the Applicant and were classified as belonging to the Promoter Group. JSCL has 2,78,370 (0.22%) equity shares in the Applicant Company as investment

3. JSCL went into liquidation and the Official Liquidator of JSCL in the process of realising the investments has made a proposal for sale of shares of the applicant held by JSCL and Dr. V. L. Indira Dutt, Promoter and Chairperson-cum-Managing Director (hereinafter CMD) of the Applicant Company, has agreed to purchase the shares at market price.

4. KCPL has closed the trading window from 1st January 2021 till 48 hours on declaration of financial result for the quarter ended 31st December 2020.

Guidance sought:

1. Whether the CMD of the Applicant company can acquire 2,78,370 shares from the Liquidator of JSCL at market price, during the closure of trading window as off-market sale, as JSCL is also a promoter group of the Applicant and both are considered as insiders and both of them have confirmed that there is no material information about the company and that they are making a conscious and informed trade decision.

2. Whether the compliance officer can give clearance for sale of shares during the closing period of trading window?

3. What are the other declarations/confirmations required to be obtained from the Liquidator of JSCL and promoter & CMD of the Applicant company for the sale?

Provisions Involved:

Regulation 4(1)[i] read with Clause 4(3) of Schedule B[ii] of the SEBI (Prohibition of Insider Trading) Regulations, 2015(hereinafter referred to as

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