Sebi orders impounding over Rs 8 cr illegal gains in PC Jeweller insider-trading case

Markets regulator Sebi on Tuesday ordered impounding of alleged unlawful gains of more than Rs 8 crore made by two promoters and related entities of PC Jeweller in an insider trading case.

The two promoters are Shivani Gupta and Sachin Gupta, and others are Amit Garg and Quick Developers Pvt Ltd (QDPL).

The latest ruling comes after a probe into the movement of share price of PC Jeweller during the April-July 2018 period. The watchdog looked at whether entities entities had traded in the scrip on the basis of Unpublished Price Sensitive Information (UPSI) pertaining to the company's buyback of shares.

The prima facie case pertains to late Padam Chand and Balram Garg allegedly communicating UPSI -- with regard to the proposal for buyback of equity shares and its subsequent withdrawal -- to Shivani, Sachin, Amit and QDPL. It was also alleged that they traded using the information.

Shivani is the daughter- in-law of Padam Chand Gupta, who was the chairman of PC Jewellers; Sachin is the husband of Shivani and son of Padam Chand; Amit is the nephew of Padam Chand and Balram Garg, Managing Director and Promoter of PC Jeweller. Garg held 50 per cent stake in QDPL.

As per latest shareholding data with the BSE, Shivani and Sachin are promoters of the jewellery house.

In its 15-page order, Sebi noted that Shivani, Sachin, Amit and QDPL being insiders have prima facie violated the insider trading regulations, by trading in the shares of PC Jeweller when in possession of UPSI thereby indulging in insider trading.

Accordingly, the regulator said a sum of over Rs 6.17 crore should be impounded jointly and severally from Shivani, Sachin and Amit Garg -- the amount being the notional loss avoided on account of trades carried out in the trading accounts of Shivani.

In addition, over Rs 2.13 crore should be impounded jointly and severally, from QDPL and Amit Garg. This amount is the notional loss avoided/ gains made on account of trades carried out in the trading account of QDPL.

No proceedings need to be initiated against Padam Chand, who passed on January 28, 2019, the order said.