Indiabulls insider trading: Sebi impounds Rs 87.2 lakh from ex-director, spouse

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Published: May 25, 2019 2:15:45 AM

They had such information with respect to sale of India Land and Properties (ILPL) to Indiabulls Infrastructure (IIL) and investment of IIL in ILPL.

Being spouse of Pia Johnson, Mehul also is considered ‘insider’, the regulator said.

Markets regulator Sebi on Friday ordered impounding of alleged unlawful gains of `87 lakh made by Indiabulls Ventures’ former non-executive director and her husband in an insider-trading case. At the time of alleged violation, Pia Johnson, non-executive director of Indiabulls Ventures (IVL), and her husband Mehul Johnson traded in the scrip of IVL when in possession of unpublished price sensitive information (UPSI)), Sebi said.

They had such information with respect to sale of India Land and Properties (ILPL) to Indiabulls Infrastructure (IIL) and investment of IIL in ILPL.

According to the order, ILPL was indirectly owned by IVL whereas IIL is a wholly-owned subsidiary of Indiabulls Real Estate.
It was observed that the proposal relating to grant of loan from IIL to ILPL against securities originated on January 24, 2017. The proposal ultimately led sale of ILPL to IIL/investment of IIL in ILPL and same was made public on March 15, 2017, the regulator said.
Therefore, the period from January 24 to March 15, 2017 was considered to be period of UPSI, Sebi said.

The regulator said Pia Johnson was a member of the management committee of the board of directors of IVL, hence she was reasonably expected to have access to the UPSI, thereby she is considered to be an ‘insider’ under the Insider Trading regulations. Being spouse of Pia Johnson, Mehul also is considered ‘insider’, the regulator said.

During the UPSI period, Pia traded 5.5 lakh shares while Mehul traded over 3.38 lakh shares, making collectively alleged gains of `69.09 lakhs. As the gains were made in 2017, it becomes necessary to levy an annual 12% interest on the alleged gains which makes the total amount to `87.21 lakh, Sebi noted.

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