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Issues Involved:
1. Whether the decision of Solrex to purchase shares of the target company constitutes Unpublished Price Sensitive Information (UPSI). 2. Whether Mr. V. K. Kaul falls within the definition of an 'insider' under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992. 3. Whether the principles of natural justice were violated by not providing the complete investigation report to the appellants. 4. Whether the circumstantial evidence is sufficient to establish the charge of insider trading against Mr. V. K. Kaul. Summary: Issue 1: Decision of Solrex as UPSI The Tribunal held that the decision of Solrex to purchase shares of the target company is indeed UPSI for Solrex, as this decision, if published, is likely to materially affect the price of the securities of the target company. The Tribunal emphasized that the term 'price sensitive information' in regulation 2(ha) is broad enough to include information relating directly or indirectly to 'a company'. Therefore, the decision of Solrex to purchase shares of the target company is UPSI for the insiders of Solrex. Issue 2: Definition of 'Insider' The Tribunal concluded that Mr. V. K. Kaul falls within the definition of an 'insider' as per regulation 2(e) of the Regulations. Mr. Kaul was a director of Ranbaxy and had access to UPSI. The Tribunal noted the frequent telephonic contacts between Mr. Kaul, Mr. Malvinder Mohan Singh, and Mr. Umesh Sethi during the relevant period, leading to a reasonable presumption that Mr. Kaul was aware of the decisions regarding the purchase of shares by Solrex. Issue 3: Principles of Natural Justice The Tribunal rejected the argument that the principles of natural justice were violated. It was noted that the findings of the investigation report were communicated to the appellants, satisfying the requirements of Regulation 9 of the Regulations. Therefore, the Tribunal found no merit in the contention that the inquiry was vitiated due to non-availability of the complete investigation report. Issue 4: Sufficiency of Circumstantial Evidence The Tribunal upheld the adjudicating officer's reliance on circumstantial evidence, noting that the sequence of events and the pattern of trading by Mr. Kaul strongly indicated insider trading. The Tribunal referred to the relevance of circumstantial evidence as recognized in the Rajaratnam case and other precedents. The Tribunal found that the circumstantial evidence, including the timing of trades and the relationship between the parties involved, was sufficient to establish the charge of insider trading against Mr. Kaul. Conclusion: The appeals were dismissed, and the impugned order of the adjudicating officer imposing penalties on the appellants was upheld.
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