Regulator Sebi has barred four persons from the capital markets for five years in a case related to insider trading in shares of KLG Capital Services. The order has been passed against former executive director of SKIL Praveen Mohnot, his daughter Priyanka Singhvi, ex-deputy chairman of SKIL N Ravichandran, and his wife Anita Ravichandran.
Moreover, the regulator asked Singhvi and Anita Ravichandran to pay an amount of Rs 4.37 lakh and Rs 4.12 lakh respectively which includes unlawful gains made by them through transaction in KLG Capital shares and simple interest of 12 per cent per annum for nearly 11 years (2008-2019).
The amount has to be paid within 45 days, failing which they will be restrained from the securities market “for a further period of 5 years”, Sebi said in an order.
Sebi found that the four persons had access to unpublished price sensitive information (UPSI) relating to an impending acquisition of shares of KLG Capital by Awaita Properties Pvt Ltd (APPL).
APPL was a group company of SKIL, where Mohnot and N Ravichandran worked, according to Sebi order.
“By passing on UPSI to other persons who executed trades on the basis of such UPSI, Mohnot and N Ravichandran have indulged in insider trading,” it added.
Further, Singhvi and Anita had purchased shares of KLG while in possession of UPSI. By indulging in such activities, the four persons violated the provisions of Prohibition of Insider Trading (PIT) Regulations, it said.
Consequently, in an order passed on Tuesday, Sebi said ‘Mohnot, N. Ravichandran, Singhvi and Anita Ravichandran shall not buy, sell or deal in the securities market in any manner whatsoever, or access the securities market, directly or indirectly for a period of five years”.
The ruling comes after the Securities Appellate Tribunal (SAT) in 2015 set aside the second order passed by Sebi in 2014 and remanded the matter back to Sebi to pass a common order.
In 2014, the regulator had prohibited these four persons from dealing in the capital markets for a period 10 years.
The market regulator upon receipt of alerts in the scrip of KLG Capital had conducted an analysis of the trading activity in the scrip.
The analysis revealed that during February 22-27, 2008, Awaita Properties had acquired 17.11 lakh shares of KLG Capital through market transactions.
The acquisition had increased the shareholding of Awaita to 60.46 per cent and the same was disclosed by KLG to BSE on February 28, 2008.
Thereafter, Awaita had had made a public announcement dated March 3, 2008 to acquire another 20 per cent shares of KLG.
Source- Economic Times.