Sebi bans 3 entities in Infibeam Avenues insider trading case

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April 28, 2021 5:27 PM

In addition, they have been restrained from buying, selling or otherwise dealing in securities of IAL directly or indirectly, in any manner for a period of two years. Also,the Securities and Exchange Board of India (Sebi) imposed a penalty of Rs 15 lakh on each entity.

In addition, the company had allotted preference shares to a total of 1,071 investors and garnered Rs 19 crore during 2014-15 and 2015-16, as per the order.In addition, the company had allotted preference shares to a total of 1,071 investors and garnered Rs 19 crore during 2014-15 and 2015-16, as per the order.

Regulator Sebi has barred three entities from the capital markets for one year for indulging in insider trading in the shares of Infibeam Avenues Ltd (IAL). The entities facing ban are Shah Dhiren Mahendrakumar (HUF), Amee Dhiren Shah and Affluence Fincon Service (P) Ltd, according to a final order passed by Sebi on Tuesday.

In addition, they have been restrained from buying, selling or otherwise dealing in securities of IAL directly or indirectly, in any manner for a period of two years. Also,the Securities and Exchange Board of India (Sebi) imposed a penalty of Rs 15 lakh on each entity.

It further said the amount of Rs 2.61 crore that has been kept as fixed deposit by the entities with Sebi, “alongwith interest accrued thereon, stands disgorged and shall be remitted to Investor Protection and Education Fund (IPEF)”.

An investigation was conducted into shares of IAL for the November 2016 to June 2017 period to ascertain whether certain entities had traded in the scrips while in possession of Unpublished Price Sensitive Information (UPSI).

Trading in shares of a company while in possession of UPSI of the same violates provisions of PIT (Prohibition of Insider Trading) Regulations.

During the investigation, Sebi found that the three entities, collectively called Dhiren Group, made wrongful gains by trading in the scrip of IAL while in possession of UPSI pertaining to stock split.

During UPSI period, Dhiren Group had bought total 8.32 lakh shares worth Rs 81.29 crore and sold 3 lakh shares to the tune of Rs 30.19 crore. During post UPSI period, the group sold 2.55 lakh shares worth Rs 32.98 crore, it added.
The three entities were found to be connected to the promoters/directors/ key management personnel of IAL and thus were having access to UPSI , Sebi noted.

By indulging in such trading, the entities have violated the provision of insider trading norms. Also, they have been found to have made unlawful gains by violating the provisions of securities laws, Sebi noted.

In a separate order, Sebi has restrained six entities from the capital markets for up to two years in a case related to insider trading in the shares of Suprajit Engineering Ltd. In addition, the six entities have been asked to disgorge the wrongful gains made by them.

Suresh Shetty, Suresh Shetty (HUF) and Emerging Securities have been barred from the capital markets for two years. Further, they have been restrained from dealing in the securities of Suprajit Engineering for three years. In addition, the regulator slapped a fine of Rs 30 lakh on each of them. HUF stands for Hindu Undivided Family.

Reetha Shetty, Vanijya Investment and Trading and Shruti Shetty have been prohibited fom the capital markets for one year. Also, they have been prohibited from buying or selling the company’s shares for two years.
Further, Sebi levied a fine of Rs 15 lakh on each of these three entities.

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