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Sebi imposes ₹6 lakh fine on 3 individuals for violating insider trading norms

Oct 2, 2022

Markets regulator Sebi on 2 October informed that it has imposed fines totalling ₹6 lakh on three individuals for violating the insider trading norms in the shares of PVR Ltd.

The individuals -- Gautam Dutta (Noticee 1), NC Gupta (Noticee 2) and Pramod Arora (Noticee 3) -- were the designated persons/ employees of the company and are collectively referred to as noticees', Sebi said in an order on Friday.

Following the adjudication proceedings against Dutta, Gupta and Arora, Sebi imposed the fines and in its order it said that the accused were dealing in the shares of PVR allegedly in violation of PIT (Prohibition of Insider Trading) rules for the period April 2014 to March 2017.

SEBI found that Dutta had conducted contra trades during the trading window closure period in the shares of PVR for which he did not take pre-clearances from the board of the company. Further, for some of the trades, he did not make disclosures, thereby violating the PIT regulations.

In addition, Gupta did contra trades, for which no pre-clearance was taken from the board as well, Sebi said, adding Gupta incorrectly took some of the trades clearance from the company's Senior Vice President instead of the board of directors of the company and non-disclosure of trades on Gupta's part exceeding ₹5 lakh each in value to PVR in contravention of the insider trading regulations.

"Noticees 1, 2 and 3 were respectively - CEO Operations, Company Secretary and Compliance Officer, and Chief Development Officer, and were "designated persons of the company". They were required to comply with the provisions of pre-clearance of trades in terms of the model code of conduct rules framed by the company and disclosure norms under the PIT rules. However, they failed to follow that thereby violating the norms," Sebi's Adjudicating Officer N Hariharan said.

The markets regulator also noted that Dutta, Gupta and Arora have remitted the profits accrued from their contra trades to PVR Ltd and the company in turn paid the respective disgorged amounts of profit to market watchdog's Investor Protection and Education Fund (IPEF).

Dutta and Arora despite receiving information from the company regarding the closure of the trading window conducted trades in the shares of the PVR, violating the PIT rules.


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