Sebi has barred three individuals from the securities market for two years and imposed penalty totalling Rs 90 lakh on them in a case pertaining to insider trading activities in the scrip of Zee Entertainment Enterprises Ltd (ZEEL).
The three individuals banned by the regulator -- Bijal Shah, Gopal Ritolia and Jatin Chawla -- have also been directed to pay the fine within 45 days.
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In addition, Ritolia and Chawla have been directed to disgorge illegal gains to the tune of Rs 7.52 crore and Rs 2.09 crore respectively along with interest, the regulator said in its 152-page final order on Friday.
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The case relates to insider trading activities by certain entities in the scrip of ZEEL, while in possession of unpublished price sensitive information (UPSI) pertaining to audited financial results of the media company for the quarter ended June 30, 2020 as well as launch of ZEEPLEX by the company on September 1, 2020.
Bijal Shah, who was head of the financial planning and analysis, strategy and investor relations at ZEEL during the relevant time, had access to this unpublished price sensitive information.
He in turn, communicated the information to Ritolia and Chawla, who traded on the basis of this information and earned profits to the tune of Rs 7.52 crore and Rs 2.09 crore respectively, the Securities and Exchange Board of India (Sebi) said.
According to the regulator, Shah is not liable for insider trading, he has played the primary role in disclosing the unpublished Price sensitive information to Ritolia and Chawla, which resulted in the violation of the provisions of insider trading rules.
"The allegations against the noticee Nos. 2 (Ritolia) and 3 (Chawla) for committing insider trading and against noticee no. 1 (Shah) for communicating the UPSI to Noticee Nos. 2 and 3 have been adequately established," Sebi said.
Accordingly, Sebi has restrained these individuals "from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities (including units of mutual funds), directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of two years." Also, a penalty of Rs 30 lakh each has been imposed on the three individuals.
In August 2021, Sebi had passed an interim order in the matter prohibiting 14 entities, including individuals, from the securities market until further orders by and impounded illegal gains of Rs 23.84 crore generated from insider tradings.
Later a confirmatory order was passed by Sebi against certain entities in September 2021.
Pursuant to passing of these orders, Sebi conducted an investigation to ascertain whether the acts of notices were in violation of the provisions of the insider trading rules during the period from September 2019 to December 2020.
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