Chennai, May 22 (IANS): After being charged by Securities and Exchange Board of India (SEBI) with insider trading, A. Vellayan has stepped aside as the executive chairman of the Murugappa Group board and chairman of Coromandel International Ltd, a statement said.

"In keeping with family values and tradition, he has stepped aside from the chairmanship of the Murugappa Group Corporate Board and of Coromandel International Ltd. and EID Parry India Ltd. until this matter is resolved," said a pressnote from Vellayan's office.

IANS attempted to contact Vellayan for comments but he was not available.

Company officials were also not available for comments on who would look after Vellayan's position in his absence.

On Thursday, SEBI charged Vellayan and three other people, including two relatives, with insider trading.

In its order, the market regulator said Vellayan, chairman of Coromandel International, seemed to have passed on unpublished price sensitive information (UPSI) to other persons in the matter of acquiring Sabero Organic Gujarat.

The others charged by SEBI with insider trading are Gopalakrishnan C., V. Karuppiah and A.R. Murugappan. Karuppiah is the son-in-law of Murugappan, while Murugappan is the maternal uncle of Vellayan, whose grandfather is the brother of Murugappan's mother.

SEBI, in its order, impounded unlawful gains made by Gopalakrishnan and Karuppiah, along with interest to the tune of Rs.2.15 crore.

The market regulator said the unlawful gains are lying in the bank accounts of Gopalakrishnan, Karuppiah, Murugappan and Vellayan.

If the funds are found to be insufficient to meet the figure of unlawful gains, as directed, then the securities lying in the demat account of these persons will be frozen to the extent of the remaining value, it said.

Reacting to the order, the statement from Vellayan's office said: "The SEBI order linking Mr A. Vellayan, chairman of the Murugappa Group, to trades by two individuals in shares of Sabero Organics Gujarat Ltd., a company that was acquired by Coromandel International Ltd. in May 2011, is based merely on suspicion and is a far-fetched tenuous conjecture."

According to the note, the only purported link sought to be made by SEBI between Vellayan and these transactions is that Murugappan is a distant relative and had a property transaction before the Sabero transaction was thought of.

"The link drawn in this interim order is not a conclusive finding. Mr. A Vellayan is resolute in defending the serious harm to reputation caused by this order and will take appropriate action as legally advised," it added.

"The SEBI order is really surprising. The Murugappa group is looked at with respect," an industry watcher told IANS preferring anonymity.