magistrates court here has issued summons to Hindustan
Lever Ltd (HLL) and its directors in a criminal complaint
filed by the Securities and Exchange Board of India (Sebi)
in 1998 for alleged insider trading by them prior to the
merger of Brooke Bond India with HLL.
Sebi had approached
the Bombay High Court a month ago complaining of inordinate
and abnormal delay by the magistrate taking cognisance
of the case. The magistrate has not taken a decision
in the matter for more than three years. The matter continues
to be adjourned for the last three years.
Now, the Bombay
High Court has directed the metropolitan magistrate to
proceed with the case without delay. It is following
this that the metropolitan magistrate issued summons to
the company and its directors.
The five HLL directors
who were originally named in the case are S M Datta, M
Dadiseth, R Gopalakrishnan, M K Sharma and A Lahiri. Some
of them are no longer with HLL.
summons, HLL says the summons has been obtained by Sebi
without bringing to the courts notice the material portion
of the appellate authoritys order. (The appellate authority,
constituted by the ministry of finance, had quashed Sebis
original order which accused HLL of insider trading).
In a press release,
HLL quoted the appellate authoritys order of July 1998:
We hold that Sebi was most unjustified in ordering prosecution
of the appellants (HLL). This portion of the appellate
authoritys order was also not stayed by the Mumbai High
Court in its interim order of September 1998.
had wanted to bring it to the notice of the magistrate
that Sebi had filed the complaint in disregard of the
appellate authoritys order and without bringing it to
the notice of the court that Sebis order had been quashed.
HLL, therefore, made an application to the magistrate
that summons should not be issued before the company is
However, the Bombay
High Court had, on 3 September 2002, quashed this application
on the ground that the company could not be heard before
summons is issued.