Insider trading case: Sebi levies Rs 1.05 cr fine on Indiabulls Venture

The former non-executive director, Pia Johnson, and her husband, Mehul Johnson, violated the Prohibition of Insider Trading norms by trading in firm's scrip

Markets regulator Sebi on Friday slapped a total fine of Rs 1.05 crore on Indiabulls Venture, its former non-executive director, her husband and the firm's company secretary for contravening insider trading norms.

The firm is currently known as Dhani Services.

The former non-executive director, Pia Johnson, and her husband, Mehul Johnson, violated the Prohibition of Insider Trading (PIT) norms by trading in firm's scrip while in possession of unpublished price-sensitive information (UPSI) when the trading window ought to have been closed.

Mehul was also an employee of Indiabulls Real Estate Ltd (IREL) and has association with Indibulls Group companies.

Pia and Mehul made collective gains of Rs 69.09 lakh. The investigation period is January-November 2017.

For violation of insider trading norms, Pia and Mehul Johnson are facing a fine of Rs 25 lakh each.

In March 2017, the company told the NSE that Indiabulls Distribution Services Ltd, a wholly-owned subsidiary of Indiabulls Venture, had signed a definitive agreement to sell its 100 per cent stake in India Land and Properties Ltd, at a consideration of Rs 685 crore, to Indiabulls Infrastructure Ltd, a wholly-owned subsidiary of IREL.

Together, Pia and Mehul bought 8.44 lakh shares of the company during February-March 2017.

Through another order, Sebi levied a fine of Rs 50 lakh on Indiabulls Venture and Rs 5 lakh on its company secretary Lalit Sharma, as the company failed to fulfil the responsibility to notify the period of closure of trading window while Sharma failed to monitor adherence to the same.

By not notifying the trading window and not closing the trading window during the UPSI period, they violated norms specified under PIT regulations pertaining to minimum standards for code of conduct to regulate, monitor and report trading by insiders.

"The laxity and carelessness shown by the Noticees No. 1 and 2 as found in this case has put the investors in dis-advantage position in comparison to 'insiders' and the same cannot be in the interest of securities market," Sebi said referring to the firm and company secretary.

Separately, Sebi advised MSS Securities Pvt Ltd to be more careful in future with respect to the dealings in the securities market. The regulator also advised it to adopt due diligent measures such as checks and balances in terms of adequate systems and procedures in its operations to avoid any regulatory lapse.

The firm was formerly known as Malini Sanghvi Securities Pvt Ltd.

Sebi had conducted investigation after receiving a complaint from Tata Finance Ltd which alleged violation of several market norms by the stock broker.