Five months after stepping aside over alleged insider trading, A. Vellayan on Friday resumed charge as the chairman of Murugappa corporate board, the group said.
In a statement, the board said it had requested Vellayan to resume the chairmanship after an assessment of the status of the ongoing proceedings against alleged insider trading and considering expert legal advice on this matter.
“The group corporate board believes that this action is consistent with the group’s values of putting all stakeholder interests first and enables Mr. Vellayan to resume the chairmanship of the group to continue providing the requisite strategic direction and leadership for the group’s interests,” the statement said.
After being charged by Securities and Exchange Board of India (SEBI) along with three others, including two relatives, with insider trading in May, Vellayan has stepped aside as the executive chairman of the group board and chairman of Coromandel International Ltd.
“In keeping with family values and tradition, he has stepped aside from the chairmanship of the Murugappa Group corporate board and of Coromandel International Ltd. and EID Parry India Ltd. until this matter is resolved,” said a press note from Vellayan’s office in May.
In its order, the market regulator said Vellayan seemed to have passed on unpublished price sensitive information (UPSI) to other persons in the matter of acquiring Sabero Organic Gujarat.
The others charged by SEBI with insider trading are Gopalakrishnan C., V. Karuppiah and A.R. Murugappan. Karuppiah is the son-in-law of Murugappan, while Murugappan is the maternal uncle of Vellayan, whose grandfather is the brother of Murugappan’s mother.
SEBI, in its order, impounded unlawful gains made by Gopalakrishnan and Karuppiah, along with interest to the tune of Rs.2.15 crore.
If the funds are found to be insufficient to meet the figure of unlawful gains, as directed, then the securities lying in the demat account of these persons will be frozen to the extent of the remaining value, it said.
Reacting to the order, the statement from Vellayan’s office termed it “based merely on suspicion and is a far-fetched tenuous conjecture”.
It said that the only purported link sought to be made by SEBI between Vellayan and these transactions is that Murugappan is a distant relative and had a property transaction before the Sabero transaction was thought of.