12 Mar , 2025 By : Debdeep Gupta
Shares of electronics manufacturer Kaynes Tech recovered to post a sharp fall of over 8% in early trade on March 12, after the company informed that capital market regulator Sebi had issued a show-cause notice to Ramesh Kunhikannan, the Managing Director over insider trading allegations.
This is the biggest fall in the share price in six weeks.
"The Notice alleges suspected violations in the maintenance of Structured Digital Database (SDD) about financial results for the period ended March 31, 2023, as per Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (hereinafter referred to as PIT Regulations)," the notice said.
The company has responded by saying it is currently reviewing the notice and will take 'all appropriate legal and procedural steps', including providing a timely response to the regulator.
A Structured Digital Database (SDD) is a digital system for companies to track and record the flow of Unpublished Price Sensitive Information (UPSI) internally and externally, a measure to prevent insider trading. The SDD is a regulatory requirement under the SEBI (Prohibition of Insider Trading) Regulations, 2015, and tracks the sharing of UPSI, identifying receivers and senders, and the nature of shared information.
Maintaining of a proper SDD helps companies meet regulatory obligations under the Sebi's regulations.
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