10 yr ban on 5 persons by Sebi in insider trading case

Sebi has barred three senior executives of SKIL Infrastructure from capital market as well as from holding position as directors on board of listed firms for a period of 10 years in a case related to insider trading in shares of KLG Capital Services.
The order has been passed against SKIL's President - Business Development Hemant R Patel, Executive Director Praveen Mohnot and Deputy Chairman N Ravichandran.
Besides, Sebi has also barred Mohnot's daughter Priyanka Singhvi and Ravichandran's wife Anita Ravichandran from the dealing in the capital markets for a period 10 years.
Moreover, Sebi has asked Hemant R Patel and Hemant Patel (HUF), Priyanka Singhvi and Anita Ravichandran to pay an amount of about Rs 3 crore which includes unlawful gains made by them through transaction in KLG Capital shares and simple interest of 12 per cent per annum for 6 years (2008-14).

Sebi found that the executives and their relatives had access to unpublished price sensitive information (UPSI) relating to an impending acquisition of shares of KLG Capital by Awaita Properties. SKIL is a group company of Awaita.
The market regulator said that individuals while in possession of the information had undertaken transactions in the shares of KLG Capital which was in violation of 'Prohibition of Insider Trading' norms.

Accordingly, in an ruling dated July 24, the watchdog has restrained the individuals from dealing in securities market "for a period of 10 years".
Moreover, Hemant Patel, Praveen Mohnot and N Ravichandran hhave been prohibited from holding position of Director in the board of any listed company "for a period of 10 years".

Hemant Patel and Hemant Patel (HUF) has to pay an amount Rs 73.87 lakh, Priyanka (Rs 1.21 crore) and Anita (Rs 94.83 lakh) as disgorgement of unlawful gains and interest thereof.
The amount has to be paid within 45 days failing which they shall be restrained from the securities market "for a further period of 5 years", Sebi said.
The market regulator upon receipt of alerts in the scrip of KLG Capital had conducted an analysis of the trading activity in the scrip.
From the same, it was revealed that during February 22, 2008 to February 27, 2008, Awaita Properties had acquired 17.11 lakh shares of KLG Capital through market transactions.

Such acquisition had increased the shareholding of Awaita to 60.46 per cent and the same was disclosed by KLG to BSE on February 28, 2008.
Thereafter, Awaita had made a public announcement dated March 3, 2008 to acquire another 20 per cent shares of KLG.
The probe found that the five indivuduals had bought substantial number of KLG shares, based on the UPSI, relating to the impending acquisition by Awaita.
In September 2009, Sebi had passed a similar order agisnt the indivuduals, however, SAT had directed the regulator to pass a fresh order in the case.