Vellayan resigns as Murugappa chairman

Vellayan resigns as Murugappa chairman
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Vellayan resigns as Murugappa chairman. 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.

Chennai: 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 Thursday's Sebi order 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.

On Thursday, Sebi had ordered impounding of Rs 2.15 crore lying in bank accounts of A Vellayan, his relative A R Murugappn and two others (Gopalkrishnan C, V Karuppiah) with immediate effect after finding them guilty in an insider trading case. ".

Prima facie it appears that the trading by Gopalkrishnan was based on the knowledge of UPSI (unpublished price sensitive information). Further, the trading of Karuppiah (HUF) also appears to be based on the knowledge of UPSI... It appears that the UPSI had passed on from Vellayan and Murugappan," Sebi had said.

"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".

"SEBI has jumped to the conclusion that the trades could potentially be attributed to suspected communication of unpublished price sensitive information about the Sabero deal by A Vellayan to this distant relative," it said.

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