Prohibition on forward dealings in securities of company by director or key managerial personnel
(1)
No director of a company or any of its key managerial personnel shall buy in the company, or in its holding, subsidiary orassociate company
(a)
a right to call for delivery or a right to make delivery at a specified price and within a specified time, of a specified number of relevant shares or a specified amount of relevant debentures; or
(b)
a right, as he may elect, to call for delivery or to make delivery at a specified price and within a specified time, of a specified number of relevant shares or a specified amount of relevant debentures.
(2)
If a director or any key managerial personnel of the company contravenes the provisions of sub-section ( 1 ), such director or key managerial personnel shall be punishable with imprisonment for a term which may extend to two years or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.