Sastry Karra, the chief executive and founder of Hardy Oil and Gas, sold £1.87m worth of shares to discharge an obligation to Swiss bank UBS over a personal loan guaranteed on his holdings in several companies.
Karra's sale came as UK regulator, the FSA, tightened up on directors using shares as loan collateral without informing other shareholders. The regulator says all such deals must now be disclosed by 23 January.
Hardy said Karra used the proceeds from the sale of 1.1m shares at 170p each to discharge fully any outstanding obligation to UBS.
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"As a result, the security over any ordinary shares in Hardy is in the process of being released," said the group.
Between September 2006 to the present date, Karra deposited 5.7m shares - about 8% of the company's equity- in Hardy with UBS.
"When these shares were deposited with UBS, Mr Karra believed that the arrangements did not constitute a transaction under the FSA Disclosure and Transparency Rules," said Hardy.
"However, following recent press comments on this issue concerning other companies, Mr Karra has taken further advice and has made a notification to the Company in accordance with DTR 3.1.2," it added.
Karra now holds 6.8m shares, which represents 11% of the company.
Meanwhile, Yogeshwar Sharma, director and chief operating officer of Hardy, has acquired 100,000 shares at 170p each. He is now interested in 4.1m shares, representing 6.6% of Hardy.
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