SC admits SEBI's plea against Alliance Capital

NEW DELHI: The Supreme Court today admitted a petition by SEBI challenging sectoral tribunal SAT's ruling that quashed its order imposing a penalty of Rs 15 crore on Alliance Capital Asset Management (India) Pvt Ltd and Alliance Capital Management Ltd for indulging in insider trading. A bench headed by Justice C K Thakker while admitting the matter also tagged it with a similar petition (SEBI Vs Samir Arora) pending before it since 2004. The Securities Appellate Tribunal in November last year had held that if the appellants Alliance Capital Asset Management (India) Ltd and Alliance Capital Management as masters of one Samir Arora were to be held vicariously liable for his acts, it had first to be established that the servant (Arora) was liable. "The master's liability can arise only when servant is liable. ...Arora has already been absolved of the charges leveled against him and has been honourably exonerated. In this view, the appellants as the employers of Arora cannot be held vicariously liable." SAT had exonerated Arora on October 15, 2004. SEBI had barred Arora, chief investment officer of Alliance Capital Asset Management (India) Pvt Ltd (ACAML), from dealing in securities, directly or indirectly, for insider trading, non-disclosures and wrong disclosures of investments for a period of five years. Besides, Arora's arrangement with Henderson Global Investors for purchase of ACM's stake in ACAML was in conflict with his interest as a fund manager, it said.
THE ECONOMIC TIMES; Wednesday 16 Apr, 2008, 1614 hrs IST, PTI