InvestorQ : Why has SEBI penalized the promoters of Kirloskar Brothers?
diksha shah made post

Why has SEBI penalized the promoters of Kirloskar Brothers?

shrinidhi Rajan answered.
7 months ago

This actually pertains to a case way back in the year 2010 which SEBI has been investigating for some time. It refers to charges of insider trading in a group stock when the two factions of Kirloskar Brothers were warring for control of the group.

SEBI has now come out and penalized the promoters of Kirloskar Brothers will a massive penalty of Rs.31 crore for breach of securities market norms. The amount of Rs.31 crore is towards penalties and disgorgement of profits made illegally by the promoters at that time.

The case actually dates back to the year 2010 when Kirloskar Industries was made to buy shares of Kirloskar Brothers Limited or KBL. As per SEBI investigations, it has been reported that at that point of time, many family members of the Kirloskar group with access to inside information sold the shares and made disproportionate profits in the process.

In addition to this penalty and disgorgement order, SEBI has also ordered Rahul and Atul Kirloskar to stay away from participating in the securities market for a period of 6 months effective immediately. This is one of the largest insider trading penalties levied in India.