The Hindu Business Line : Samir Arora case — Definition of insider is too wide: SAT

THE definition of insider is too wide for interpretation and anybody can be termed an insider in hindsight, observed Mr Justice Kumar Rajaratnam, Presiding Officer of the Securities Appellate Tribunal, while hearing the appeal of Mr Samir Arora against a SEBI order.

Mr Arora, the former Chief Investment Officer of Alliance Capital Mutual fund, has been prohibited from buying, selling or dealing in securities for a period of five years by SEBI.

SAT has been hearing the Samir Arora case since last week. SEBI's arguments about the `insider trading' charge will now be heard by the tribunal on August17.

SAT today heard the charge of making misleading statement with a view to influencing the market price of Digital GlobalSoft.

According to SEBI's order Mr Arora had made positive statements in interviews about an impending merger of Digital GlobalSoft with HPISO, A US-based IT major. Subsequently, Mr Arora sold all the shares of Digital Global held by his friend, despite making such positive references.

Mr Arora's team countered that the analysts of the fund house had recommended a `sell' on the scrip because of the bipolarity of the merger news and expectations were that the scrips could wither gain or lose substantially; and Mr Arora was merely following these recommendations.

SEBI's order, published in March 2004, had found Mr Arora guilt of grave professional misconduct calling for remedial action and indulging in manipulative transactions and insider trading.

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