Sebi orders impounding of Rs 1.44 crore in insider trading case to 4 entities

Sebi found Abhijit Rajan, former CMD of Gammon Infrastructure Projects had access to 'unpublished price sensitive information' related to termination of shareholders' agreement between his company and Simplex Infrastructures

Markets regulator Securities and Exchange Board of India Tuesday ordered impounding of alleged illegal gains worth over Rs 1.44 crore from Abhijit Rajan, former CMD of Gammon Infrastructure Projects and three other entities in an insider trading case.

The other three entities are Consolidated Infrastructure Company and its directors are Indru B Hingorani and Kiran Indru Hingorani respectively. 

A Sebi conducted probe found Rajan, being an 'insider', had access to 'unpublished price sensitive information' related to termination of shareholders' agreement between Gammon Infrastructure and Simplex Infrastructures and was in possession of the same. He dealt in the shares of Gammon on the basis of that during August-September 2013 period.

Rajan was the Chairman and Managing Director of Gammon Infrastructure during the period when the shares were sold.

In addition, Rajan had also communicated the UPSI to Consolidated Infrastructure Company Pvt Ltd (CICPL), Sebi noted.

"By indulging in 'insider trading' and sold shares while in possession of UPSI, Rajan and CICPL had averted losses," Sebi Whole Time Member S Raman said in an order.

This would be one of the few cases where CMD of a company has come under the scanner in an insider trading case.

Accordingly, Sebi has ordered to "impound the alleged unlawful gains of a sum of Rs 1,44,37,670 (alleged gain of Rs 1,10,23,658 plus interest of Rs 34,14,012 from August 23, 2013 upto March 21, 2016), jointly and severally from the person/entity."

The (Sebi) had begun probe based on inputs from National Stock Exchange that there is a possibility that certain clients might have traded on the basis of unpublished price sensitive information in shares of Gammon Infrastructure.

In March last year, Sebi had refused to withdraw the ban on Rajan from the securities market and said the prohibition will continue till further directions. The market regulator in its interim order in July had barred him after prima-facie finding him to have violated insider trading regulations.