Securities and Exchange Board of India has imposed fines worth Rs 6 lakh on three individuals for violating the insider trading norms in the shares of PVR Ltd.
The capital markets regulator, in an order, said, “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’s this order came after it initiated adjudication proceedings against Dutta, Gupta and Arora while dealing in the shares of PVR allegedly in violation of Prohibition of Insider Trading (PIT) rules from April 2014 to March 2017.
N Hariharan, Adjudicating Officer, SEBI, said, “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,”
The regulator also found that Dutta conducted contra trades during the trading window closure period in the shares of PVR for which he didn’t take pre-clearances from the board of the company. Furthermore, he didn’t make disclosures for some of the trades, thereby violating the PIT regulations.
On the other hand, Gupta did contra trades, for which no pre-clearance was taken from the board as well. However, for some of the trades clearance was incorrectly taken by Gupta from PVR’s Senior Vice President instead of the board of directors. And non-disclosure of trades on Gupta’s part exceeding Rs 5 lakh each in value to PVR in contravention of the insider trading regulations.
SEBI said that Arora too has conducted contra trades, trades during the closure of trading window, where he didn’t obtain pre-clearances from PVR. Furthermore, there was non-disclosure of trades exceeding Rs 5 lakh each in value to PVR, thereby violating the PIT rules, it added.
However, Dutta, Gupta and Arora have remitted the profits accrued from their contra trades to the company, which in turn paid the respective disgorged amounts of profit to market watchdog’s Investor Protection and Education Fund (IPEF), according to the order.
In addition to this, 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.
