sebi:WTM/SM/ISD/ISD_ISD/16598/2022-23
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Modified the ex-parte ad-Interim Order dated January 24, 2022, restricting the restraint on dealing in securities to only the scrip of Lux Industries Ltd.; escrow deposits to remain with lien in favour of SEBI pending investigation.
Provisions invoked
- s. 11
- s. 11(4)
- s. 19
- s. 11B
- s. 12A
- s. 11A
- s. 15I
- s. 12(3)
Regulations
- Reg. 2
- Reg. 201
- Reg. 2(1)(d)
- Reg. 2(1)(g)
- Reg. 3(1)
- Reg. 4(2)
- Reg. 2(n)
Parties
- Udit Todi
- Avani Todi
- Sanjeev Bubna
- Indi Stock Private Limited
- Akshay Kapoor
- Arun Kapoor
- Dinero Finance and Investments Private Limited
- Mohd Mujtaba Ali Khan
- Shubham Somani
- Anju Somani
- SS Corporate Securities Limited
- Sunder Somani
- Suyash Somani
- Evermore Stock Brokers Private Limited
Holding
The WTM modified the ex-parte ad-Interim Order dated January 24, 2022, narrowing the restraint on the 14 Entities from dealing in all securities to dealing only in the scrip of Lux Industries Ltd., while maintaining the escrow deposit of alleged wrongful gains pending completion of investigation.
Full text
_________________________________________________________________________________________ Confirmatory Order in the matter of insider trading in the shares of Lux Industries Ltd. Page 1 of 47
_________________________________________________________________________________________ Confirmatory Order in the matter of insider trading in the shares of Lux Industries Ltd. Page 2 of 47 of the Company. The aforesaid corporate announcement of Financial Results was prima-facie observed to be satiating the ingredients of Unpublished Price Sensitive Information (hereinafter referred to as ‘UPSI’) in terms of provisions of Regulation 2 (1) (n) of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (hereinafter referred to as ‘PIT Regulations, 2015’). In terms of information furnished by the Company, the drafting of the Financials Results started on April 20, 2021 and that finally came to be disclosed on May 25, 2021, thereby the above period commencing from April 20, 2021 to May 25, 2021 has been viewed as an UPSI Period (hereinafter referred to as ‘UPSI Period’) i.e., the period during which the price sensitive information (PSI) remained unpublished and such non- public information was not generally available to the public. 3) Based on the information gathered and examination thereof by the Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) in respect of trading activities of certain entities, it was prima facie observed that the entities enjoying connection with the person who was reasonably expected to have access to the UPSI, have traded in the scrip of the Company. The abnormal and unusual trading pattern cou
_________________________________________________________________________________________ Confirmatory Order in the matter of insider trading in the shares of Lux Industries Ltd. Page 3 of 47 5) It was further noticed during examination that Ms. Avani Todi (hereinafter referred to as “Avani/Entity no. 2”), Sanjeev (Entity no. 3), Mohd Mujtaba Ali Khan (hereinafter referred to as “Mujtaba/Entity no. 8”) were having close connections and were in contact with Udit through telephonic communication during the UPSI period which gave rise to a strong preponderance of probability of receipt of UPSI or reasonable access to the UPSI by them through Udit, hence, these Entities were prima facie observed to be insiders as well, as far as the UPSI is concerned. Additionally, Ms. Avani being the wife of Entity no. 1 and daughter in law of the MD of the Company was also observed prima facie to be having access to the UPSI. Similarly, Entity no. 3 is the father of Entity no. 2 which has strongly given rise to a belief that he was having access to the UPSI through Entity nos. 1 and 2 as well. Further, Akshay (Entity no. 5), who share a close relationship with Mujtaba (Entity no. 8) and Udit, is found to have business links with the Somani family (Entity nos. 9, 10, 12 and 13) with whom he has apparently shared the UPSI and thus rendered the Somani family to the category of insiders as well. Also, two trading members (Stock Brokers) in the market i.e SS Corporate (Entity no. 11) and Evermore (E
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Source: SecMarx — sebi:WTM/SM/ISD/ISD_ISD/16598/2022-23. 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.