SEBI Orders Mawana Sugars Promoter To Return Rs 6.17 Crore For Insider Trading Violations

The Securities and Exchange Board of India on Monday ordered a promoter of Mawana Sugars to return Rs 6.17 crore obtained through insider trading. The order followed an investigation into the trading activities of Siddharth Shriram, promoter and special advisor of Mawana Sugars Ltd., from September 2017 to February 2018, during which he allegedly possessed unpublished price-sensitive information.

The investigation aimed to identify potential violations of market norms and Prohibition of Insider Trading rules. During the probe, SEBI noted that Siddharth Shriram had passed away in May 2021, and his shares were subsequently transferred to his son and legal heir, Krishna Shriram.

"I note that the unlawful loss avoided amounted to Rs 6.17 crore made by SS (Siddharth Shriram) by trading in the shares of MSL while in possession of UPSI related to the quarterly results for the quarter ending Sept. 30, 2017," SEBI's chief general manager G. Ramar said in the order.

Pursuant to the death of Siddharth, the shares of MSL were transmitted to Krishna Shriram, the regulator said.

From the list of the Board of Directors (as of Aug. 13, 2024) as provided on the website of MSL, SEBI noted that the notice (Krishna Shriram) is 'the Chairman of the Board' of MSL.

Thus, keeping in view the legal provisions and the precedents surrounding the concept of disgorgement, Krishna Shriram, being the legal heir/legal representative of Siddharth Shriram, is liable to disgorge the wrongful gains/loss avoided, which were made by trading in the shares of MSL while in possession of UPSI, the order said.

Accordingly, the regulator has asked Krishna Shriram to disgorge Rs 6.17 crore within 45 days along with an interest rate of 12% per annum to be calculated from Nov. 24, 2017, till the date of this order.

If the notice does not remit the amount with interest within 45 days from the date of this order, interest will continue to accrue until the full payment is made. The disgorged amount will be credited to the Investor Education and Protection Fund, as stated by the regulator in the order.

(With Inputs From PTI.)