They copped £100k from ‘insider dealing’

The neighbour and brother-in-law of a finance worker at a UK technology firm scooped £100,000 after being tipped off about a £1.7bn takeover, a court heard.

Reshim Birk, 55, and Surinder Pal Singh Sappal, 53, bought shares and options in Logica three days before the deal was announced to the markets.

They were allegedy acting on inside information from Logica business analyst Manjeet Singh Mohal, 59.

Sappal, who is married to the sister of Mohal’s wife, used some of the profits to pay off Mohal’s credit card debts a few months later, it is claimed.

Both men deny they were given inside information and claim they were acting on a ‘hunch’ and market research.

Prosecutor Andrew Marshall told a jury at the Old Bailey: ‘When you look at how much profit was made it amounts to about £100,000.

‘That is a couple of days work. In some ways it is ‘Bingo’, isn’t it. They have won.’

Mohal was working in the finance department at Logica, an IT consultancy based in Reading, Berkshire, while the deal was being discussed in May 2012.

It is claimed he disclosed insider information about the deal to his neighbour Birk and brother-in-law Sappal on 28 May 2012, the same day as the Board of Directors at Logica reviewed the deal.

The next day Birk contacted his financial advisor and asked to buy shares and options in Logica on a ‘hunch’.

He was given a warning about insider dealing but insisted he did not have any secret information.

Sappal also bought shares in Logica on 29 May 2012.

Two days later at 7am on 31 May 2012 the takeover by Canadian firm CGI Group was announced to the market, causing the price to rise from 65.7p to 110p by the end of the day.

Birk sold most of his shares and options within an hour and 28 minutes of the announcement, making more than £87,255 profit.

Sappal sold his 18,888 shares for a £7,500 profit three hours after the deal was announced.

The rest of Birk’s shares were sold a few months later when CGI completed the takeover.

When he was arrested Birk gave a prepared statement denying any involvement in insider dealing.

Birk said: ‘I did not receive any price sensitive information and no shares were purchased as a result of insider dealing.

‘Manjeet Mohal is my neighbour and we were in contact quite frequently at this time regarding a neighbour dispute.’

Sappal allegedly paid nearly half the profit into his daughter’s account and a few months later £4,800 was transferred from that account to pay off Mohal’s American Express credit card debt, it is claimed.

On his arrest Sappal gave a prepared statement to police denying insider dealing and added: ‘I based my decision on market research’.

He claimed the payment from his daughter’s account was to settle a long-standing £5,000 debt with Mohal, his brother-in-law.

Mohal, of [260] Norwood Road, Norwood Green, Southall, denies two counts of insider dealing.

Birk, of [256] Norwood Road, Southall, and Sappal, of Crosslands Avenue, Southall, both deny one count of insider dealing.

The trial continues.