sebi:Order/KS/VC/2020-21/8265
Facts / Headnote
Noticee held to have violated Clause 4 of Minimum Standards for Code of Conduct under Schedule B read with Regulation 9(1) of PIT Regulations, 2015 and held liable for penalty
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15J
- s. 28A
- s. 118C
Regulations relied on
- SEBI (PIT) Regulations, 2015
- SEBI (PIT) Regulations, 2015 — 4
- SEBI (PIT) Regulations, 2015 — 9(1)
Parties
- Mr. B Renganathan
Holding
The Noticee, as compliance officer of EFSL, violated Clause 4 of Minimum Standards for Code of Conduct under Schedule B read with Regulation 9(1) of PIT Regulations, 2015 by admittedly failing to close the trading window during the UPSI period January 25, 2017 to April 05, 2017, and is therefore liable for penalty.
Full text
Page 2 of 45 referred to as ‘Noticee’) was the compliance officer and Company Secretary of EFSL during IP. 2. During the course of investigation, it was observed by SEBI that Ecap Equities Limited (hereinafter referred to as ‘Ecap’), a wholly owned subsidiary of EFSL, had acquired Alternative Investment Market Advisors Private Limited (hereinafter referred to as ‘AIMIN’), a fintech company, on April 05, 2017 by entering into a share purchase agreement (SPA). The same was disclosed by EFSL to NSE and BSE on the same day. Further, a Term Sheet in respect of the said transaction was signed between Ecap and AIMIN on January 25, 2017.
Page 3 of 45 with Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’), to inquire into and adjudge under the provisions of section 15HB of the SEBI Act, the alleged failure on the part of the Noticee to comply with the relevant provisions of PIT Regulations, 2015. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING:
Page 4 of 45 bond market with efficient price discovery. FinTech is playing a vital role in transforming the financial industry worldwide as well as in India. Edelweiss is actively looking to adopt innovative FinTech Solutions to aid in matters related to illiquidity, accessibility and seed to improve offering to customers. This acquisition will help grow Edelweiss fixed income advisory business. The proposed acquisition is not with the promoter /Promoter Group and also does not fall under the related party transaction.’’ iii. It is observed that the aforesaid transaction resulted in the acquisition of AIMIN by Ecap Equities Limited (Ecap), a wholly owned subsidiary of EFSL. It is further observed that the said disclosure was made in terms of Regulation 30 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Thus, in terms of PIT Regulations, the said announcement made by EFSL is the unpublished price sensitive information (UPSI) as per Regulation 2(1)(n)(iv) and 2(1)(n)(vi) of PIT Regulations, prior to the announcement dated April 05, 2017. iv. EFSL vide email dated February 19, 2018 & letter dated January 29, 2019 and AIMIN vide email dated September 23, 2019 submitted the chronology of events in relation to the press release dated April 05, 2017. Consolidated chronology of events with respect to the aforesaid press release is as follows: Table 1: Chronology of Events Date Particulars (Details of matter discussed; Conclusions) Discussion (phone/ meetin
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Source: SecMarx — sebi:Order/KS/VC/2020-21/8265. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.