Poonawalla Fincorp case: Sebi removes securities market ban on 8 entities

Relaxing its earlier directions, Sebi on Monday removed the securities market ban imposed on eight entities with respect to alleged insider trading activities in the shares of Poonawalla Fincorp Ltd, which was earlier known as Magma Fincorp.

Passing a 62-page confirmatory order, the regulator said the eight entities are now barred from buying, selling or dealing in securities of PFL till further orders.

The interim order, passed in September 2021, stand modified to the extent of allowing credit and debit of securities in the accounts of above entities except the securities of PFL, according to the regulator.

"The observations made in the present order are tentative in nature. The investigation shall be carried out without being influenced by any of the directions passed or any observation made either in the interim order or in the present order. Based on the outcome of the same, appropriate proceeding will be initiated in accordance with law," Sebi said in the 62-page order on Monday.

Apart from barring the eight entities, including seven individuals from the securities market, Sebi, in September 2021, had also ordered impounding of wrongful gains worth over Rs 13 crore.

"It is also noted that all the entities have deposited the amount directed to be impounded by the interim order into an escrow account, pursuant to which their respective bank accounts were unfrozen.

"... pending completion of investigation, the restriction imposed in the interim order thereby prohibiting the entities to deal in securities be modified and the said restraint be continued only with respect to dealing in the scrip of Poonawalla Fincorp Limited (Magma)," the latest order said.

The ruling concerns eight entities -- Abhay Bhutada, Saumil Shah, Surabhi Kishore Shah, Amit Agrawal, Murlidhar Bagranglal Agrawal, Rakesh Rajendra Bhojgadhiya, Rakesh Rajendra Bhojgadhiya HUF and Abhijit Pawar.

"It is clarified here that the funds deposited by entities in an interest bearing escrow account will remain in the said account with lien in favour of Sebi until further orders," the regulator said.