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Sebi may toe Kale line on Talaulicar

Janaki Krishnan

Securities and Exchange Board of India is expected to take the same stance as the Kale Committee on J E Talaulicar, former director of Tata Finance.

Sebi sleuths investigating allegations of insider trading against Talaulicar said their findings were more or less along the lines of the Kale Committee and "though it is not correct for us to pre-empt the conclusions, we may end up taking the same stance that the Kale Committee has taken," they said. "The evidence collated by us is relatively indisputable."

Sebi has asked the company for a copy of the Kale Committee report. Sebi sources said Tata Finance has been non-committal in its reply.

Ishaat Hussain, director (finance), Tata Finance, said the company had told the regulator it would "revert in due course."

However, Sebi sources said they had a rough idea of the contents of the report and are proceeding with their own investigations.

In fact, there are a number of copies of the report floating in the market and it would easy for Sebi to get a copy of the same.

Sebi officials said in the event the Tata Finance management decided not to part with the report there was very little the regulator could do.

Hussain made it clear that the findings of the Kale Committee- constituted by the chairman of Tata finance and consisting of Y M Kale of A F Ferguson & Co, J K Sethna director of Tata Sons and K A Chaukar of Tata Finance - were an internal matter of the company and it was up to them to decide whether the report should be made available to Sebi or not.

Hussain said, "the board will apply its mind to it. Talaulicar has to be given a chance to reply to the findings and then we will decide".

The Kale Committee found Talaulicar guilty of insider trading. According to the findings of the panel, Talaulicar sold one lakh shares of Tata Finance at Rs 69 per share on March 30, 2001, just before the company's rights issue opened.

When the rights issue opened the price of the shares went down to Rs 40 per share. The report said that Talaulicar being an insider had prior information about Niskalp's financial position and his selling of the shares thus tantamount to action based on privileged insider knowledge.

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