Hindustan Unilever Imposes Rs 9 Lakh Fine on Independent Director for ‘Inadvertent Trade’
Ten News Network
Mumbai (Maharashtra), 20th Jan 2023: Hindustan Unilever (HUL), a leading consumer goods company in India, has imposed a fine of Rs 9 lakh on an independent director for an “inadvertent trade” in the company’s shares.
The director, who has not been named, allegedly made the trade without obtaining prior clearance from the company’s compliance officer or the audit committee.
The fine, which was imposed by the company’s audit committee, is based on the regulations set by the Securities and Exchange Board of India (SEBI) on insider trading. As per the regulations, independent directors are required to seek clearance from the compliance officer or the audit committee before making any trades in the company’s shares.
In a statement, HUL said that the director had made the trade “inadvertently” and that the company had conducted an internal investigation into the matter. The company also confirmed that the director had accepted the fine and had agreed to comply with the company’s insider trading regulations in the future.
The fine imposed on the independent director is a reminder of the strict regulations in place to prevent insider trading and the importance of compliance for directors and senior management of listed companies. Insider trading is a serious violation of securities laws and can lead to severe penalties, including fines and imprisonment.
It’s also worth noting that HUL has a reputation for being a well-governed company and this incident shows that they take compliance and regulations seriously. This action also serves as a warning to other companies and directors that they should also take necessary steps to ensure compliance with insider trading regulations.
This incident also highlights the need for companies to have robust systems and processes in place to detect and prevent insider trading. Companies should also ensure that their directors and senior management are aware of the regulations and are trained on the importance of compliance.
In conclusion, HUL’s imposition of a fine on an independent director for an “inadvertent trade” in its shares should be a reminder for all companies and directors to ensure compliance with insider trading regulations. This incident also highlights the need for companies to have robust systems and processes in place to detect and prevent insider trading.