Individual settles case with Sebi on payment of Rs 23 lakh

Sebi had initiated adjudication proceedings against Anil Agarwal over the violation of Prohibition of Insider Trading regulations

An individual, Anil K Agarwal, has settled a case related to alleged violation of insider trading norms with market regulator Sebi after payment of over 23 lakh as settlement fee.

The Securities and Exchange Board of India had initiated adjudication proceedings against Agarwal over the violation of PIT (Prohibition of Insider Trading) regulations.

It was alleged that Agarwal had purchased and sold shares of Power Grid Corporation of India (PGCIL) on seven days during 2007 to 2010 and the transacted value of these scrips was either more than Rs 5 lakh or the quantity of shares traded was over 25,000 shares.

However, he allegedly failed to make the relevant disclosure regarding change in shareholding to the company and to the concerned stock exchange.

Further, Agarwal had also failed to obtain the pre-clearance of his trades from the company before dealing in the shares PGCIL, which is prescribed under model code of conduct for prevention of insider trading for listed firms.

While proceedings against Agarwal was in progress, he had offered to settle the matter on payment of Rs 23,29,625 lakh as settlement charges under Sebi's consent order mechanism.

Thereafter, Sebi's High Powered Advisory Committee on consent recommended the case for settlement on the payment of the amount.

This was also approved by Sebi's panel of whole-time members, following which he remitted the amount.

Pursuant to a settlement under Sebi's consent mechanism, the market regulator in an order dated September 18 said it is disposing of "the adjudication proceedings initiated against the applicant (Agarwal).

Sebi said that enforcement actions, including commencing or reopening of the proceedings, could be initiated if any representation made by him is found to be untrue.

Under the consent mechanism, entities can seek to settle cases with the regulator after payment of certain charges and and other expenses without admission of guilt.