SEBI Bans Former Diageo Official In United Spirits Insider Trading Case
The headquarters of the Securities and Exchange Board of India (SEBI) in Bandra-Kurla Complex, Mumbai, India. (Photographer: Sajeet Manghat/ BloombergQuint)

SEBI Bans Former Diageo Official In United Spirits Insider Trading Case

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The Securities and Exchange Board of India has barred Nishat Shailesh Gupte, a former official of Diageo Plc, from the capital markets for seven years for indulging in insider trading activity in United Spirits Ltd.

Besides, SEBI has directed three persons related to Gupte—Poonam Haresh Jashnani, Haresh Parmanand Jashnani and Varun Haresh Jashnani—to disgorge unlawful gains totalling over Rs 1 crore made by them, along with interest, in the insider trading case.

Gupte, who was the global business development manager (mergers and acquisitions) at Diageo, was in possession of unpublished price sensitive information relating to the open offer for acquisition of shares of United Spirits by Relay BV, together with Diageo Plc as the person acting in concert.

Gupte was part of the core team which represented Diageo/PAC in the transaction to consolidate shareholding of the acquirer in United Spirits and was guiding the team since the beginning of the transaction lifecycle.

Further, the regulator said Poonam Haresh Jashnani, Haresh Parmanand Jashnani and Varun Haresh Jashnani also indulged in insider trading activity in United Spirits based on the information passed by Gupte.

Gupte is the son-in-law of Poonam Haresh Jashnani and Haresh Parmanand Jashnani, and brother-in-law of Varun Haresh Jashnani.

"Considering the close family relationship amongst Nishat, Haresh, Varun and Poonam, it can reasonably be concluded that it was Nishat who had communicated the UPSI to them," SEBI said in an order dated Jan. 10. Based on trading while in possession of UPSI, Poonam, Varun and Haresh have made ill-gotten gains, it added. By indulging in such activities, these persons violated SEBI’s Prohibition of Insider Trading regulations.

Accordingly, SEBI barred Gupte from the capital markets for a period of seven years. Besides, he has been restrained from associating himself with any listed public company.

Further, Poonam, Haresh and Varun have been asked to disgorge wrongful gains of about Rs 45.44 lakh, Rs 29.24 lakh and Rs 26.18 lakh respectively along with 12 percent interest per annum. They need to pay the amount within 45 days.

In case they fail to pay the wrongful gains along with interest as directed, SEBI will initiate recovery proceedings.

On Tuesday, United Spirits shares fell 0.28 percent to Rs 581.90 apiece on the NSE while the benchmark Nifty 50 gained 0.27 percent to end the day at 12,362.30 points.

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