Vellayan ‘steps aside’ as Murugappa Group Chairman
23 May 2015 12:54 AM GMT
Slapped with insider trading charges by market regulator Sebi, top industrialist A Vellayan on Friday “stepped aside” as Chairman of diversified Murugappa Group as also of two group firms, Coromandel International and EID Parry. While rejecting the charges, the group said Sebi action was based on mere suspicion and Vellayan would take necessary legal action to defend his reputation.
EID Parry separately said in a regulatory filing that Vellayan is stepping down as chairman following yesterday’s Sebi <g data-gr-id="27">order</g> but he will continue as a member of the board. “Vellayan is resolute in defending the serious harm to his reputation caused by this order and will take appropriate action as legally advised,” Murugappa Group said in a statement. “He is keen to also demonstrate bona fides and will extend full cooperation to SEBI to complete investigations expeditiously, apart from seeking redress against the premature measures adopted”, it added. On Thursday, Sebi had ordered impounding of Rs 2.15 crore lying in bank accounts of A Vellayan, his relative A R <g data-gr-id="28">Murugappn</g> and two others (<g data-gr-id="29">Gopalkrishnan</g> C, V Karuppiah) with immediate effect after finding them guilty in an insider trading case. “...prima facie it appears that the trading by <g data-gr-id="30">Gopalkrishnan</g> was based on the knowledge of UPSI (unpublished price sensitive information). Further, the trading of Karuppiah (HUF) also appear to be based on the knowledge of UPSI... it appears that the UPSI had passed on from Vellayan and Murugappan,” Sebi had said.
Terming SEBI’s charge as merely based “on suspicion and far-fetched tenuous conjecture,” Murugappa Group said: “In keeping with the family values and tradition, he (Vellayan) has stepped aside from the Chairmanship of the Murugappa Group Corporate Board and of Coromandel International and EID Parry India until this matter is resolved.” “SEBI order linking A Vellayan to trades of two individuals in shares of Sabero Organics Gujarat Ltd, a company that was acquired by Coromandel International in May 2011 is based merely on “suspicion” and “a far-fetched tenuous conjecture”.
FMC rejects MCX-mooted name for MD & CEO post
Commodity markets regulator FMC has rejected the appointment of Balasubramaniam Venkataramani as MD and CEO of <g data-gr-id="59">MCX,</g> after it found that the exchange did not follow the applicable guidelines in this regard. In a filing to the BSE, commodity exchange MCX said: "We wish to inform that FMC has conveyed that the proposal of the company for the appointment of Balasubramaniam Venkataramani as MD & CEO cannot be agreed to."
When contacted, a senior official at Forward Markets Commission (FMC) said that "the appointment proposal has been rejected as MCX did not follow the procedure specified in the guidelines issued last year with regard to appointment of CEO". On June 11, 2014, FMC had issued revised norms on the constitution of the Board of Directors, committees, nomination and role of independent directors and appointment of Chief Executives at the national commodity exchanges. As per the revised norms, the exchanges should constitute a selection committee for appointment of MD and CEO. The new MD should be selected through open advertisement.
The exchanges should submit an undertaking that the necessary due diligence has been carried out by them with respect to the verification of antecedents, credentials and experience of the proposed person. The proposal seeking approval of the FMC for the appointment/termination of services of MD and CEO should be submitted only with the prior approval of the Board of Directors of the Exchange. The Selection Committee should comprise of five persons -- two independent directors, two shareholder <g data-gr-id="60">directors</g> and one independent external person. At the time of seeking FMC approval for the appointment of MD and CEO, the exchange should also seek approval for the remuneration and terms and conditions from the commission.
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