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Capital markets regulator Sebi has levied fines totalling Rs 22 lakh on eight entities for violating insider trading norms in the matter of Shakti Pumps (India) Ltd. The regulator imposed fines in the range of Rs 1 lakh to Rs 9 lakh. The order came after Sebi carried out an investigation in the matter of insider trading by certain entities in the scrip of Shakti Pumps (India) Ltd (SPIL).
The regulator found that Goutam Patidar, Sanjay Patidar and Mukesh Patidar being designated employees traded in the scrip of SPIL without seeking pre-clearances from the company and further entered in contra trades within six months and made unlawful gains of Rs 9.19 lakh.
Goutam, Sanjay and Mukesh who were designated employees of SPIL are expected to comply with the statutory requirements, however, they failed to exercise reasonable care diligence while trading in the shares of the firm.
In addition, SPIL did not disgorge the unlawful gains made by these designated employee, thereby violated Code of conduct prescribed under PIT (Prohibition of Insider Trading) rules, Sebi said in the order passed on Thursday.
The probe also revealed that Goutam, Sanjay, Mukesh, Ravi Kelotra, Sunil Kumar Tewari, Kulbhushan Singh Rajput and Piyush Patidar had transacted in the securities of SPIL (on both BSE and NSE together) exceeded Rs 10 lakh in September 2017 to April 2019.
They had to make disclosures as their traded value exceeded Rs 10 lakh in September 2017 to April 2019.
However, they failed to make disclosures, thereby violated PIT regulations.
A common Show Cause Notice (SCN) was issued in September 2022 and alleged that 7 entities did not make any disclosures to the company regrading certain trades during September 2017 to April 2019 period.
As per Sebi order, the investigation period was March-October 2018.
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