Chennai based Murugappa Group says SEBI's
order linking him with insider trading is based on mere suspicion
Murugappa Group
chairman Mr. A. Vellayan resigned a day after the Securities and Exchange Board
of India (SEBI) charged him & 3 Others with insider trading. Mr. Vellayan
says he has also decided to take legal action.
Murugappa Group said
SEBI's observation linking Mr. A. Vellayan to trades by 2 individuals in shares
of Sabero Organics Gujarat, a company that was acquired by Coromandel
International in May 2011, is based on suspicion. The only link sought to be
made by Sebi between Mr. A. Vellayan & these transactions is that one Mr.
AR Murugappan is a distant relative (son of a grand aunt) & had a property
transaction with Vellayan long before the Sabero transaction was even thought
about.
“SEBI has jumped to
the conclusion that the trades could potentially be attributed to suspected
communication of unpublished price sensitive information about the Sabero deal
by Mr. A. Vellayan to this distant relative,” the company said.
“The link drawn in
this interim order is not a conclusive finding.
Mr. A. Vellayan is resolute
in defending the serious harm to reputation caused by this order and will take
appropriate action as legally advised,” the statement said.
 |
| Murugappa Group Chairman A. Vellayan |
The spokesperson said
Mr. A. Vellayan will extend full cooperation to SEBI to complete investigations
expeditiously, apart from seeking redress against the premature measures
adopted.
“In keeping with
family values & tradition, he has stepped aside from the chairmanship of
the Murugappa Group Corporate Board & of Coromandel International and EID
Parry India until this matter is resolved,” said the spokesperson.
The details of who
will take charge as the chairman hasn’t been decided, a spokesperson said.
The group says it is
one of the first Indian corporates to begin the process of transformation from
being a family-owned to a professionally managed organisation. The ownership
and operational management of the companies were seperated in September 1999.
As a logical
conclusion to this decision, Mr. M. V. Subbiah, a family member, relinquished
his office & ceased to be part of the Murugappa corporate board, in January
2004, at the age of retirement. The various businesses were entrusted to chief
executive officers from outside the family.
The company website
says, "In April 2001, Mr. M. V. Subbiah stepped down as Chairman and
handed over the reins to Mr. N. S Raghavan, a non-family professional who
became the Non-Executive Chairman of the Murugappa Corporate Board. In October
2002, yet another professional — Mr. P. S. Pai — took over from Mr. Raghavan as
Executive Chairman. On completion of his tenure, Mr. P. S. Pai handed over
charge to Mr. M. A. Alagappan, Vice Chairman and Director Strategy. Mr. M. A
Alagappan assumed the office of Executive Chairman of Murugappa Group on 25
October 2006. Effective the same date, Mr. A. Vellayan, Director — Marketing
took over as Vice Chairman and Director - Strategy. Subsequently, on 1 November
2009, Mr. A. Vellayan succeeded Mr. M. A Alagappan as the Executive Chairman
and Mr. M. M. Murugappan took over as the Vice Chairman of the Group."
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