Robust Curbs Against Front-Running In Place, Says LIC After SEBI Action

Life Insurance Corp. of India said it put in place controlling mechanisms and has taken action against the concerned official banned by the market regulator in a case pertaining to front-running trades.

On Tuesday, the Securities and Exchange Board of India confirmed a securities market ban on five entities, including an employee of LIC, in a case pertaining to the front-running trades of the state-owned insurer.

This prompted the insurance giant to implement robust controlling mechanisms along with best practices to prevent any such incidents in the future.

"Appropriate action against the concerned official has been taken by disciplinary authority by his removal from services of the corporation after following the due administrative procedure," the company said in an exchange filing.

In April 2023, SEBI barred five entities, including an employee of LIC, from the securities market and impounded illegal gains of Rs 2.44 crore made by them for allegedly front-running the trades of the state-owned insurer.

The observations by SEBI made in the present order are tentative in nature and pending further investigation.

All stringent measures for transactional hygiene in the dealing room are put in place, i.e., entry by biometric, CCTV coverage, restrictions on electronic gadgets, etc., LIC said in the statement.

SEBI clarified that the restraint imposed via the interim order dated April 27, 2023, on Yogesh Garg, Sarita Garg, Kamlesh Agarwal, Ved Prakash HUF and Sarita Garg HUF from buying, selling or dealing in securities, shall continue until further orders.

The company has always been at the forefront of being a compliant organisation, and we will continue to strengthen further on all issues of corporate governance, it said.

(With inputs from PTI)