Sebi Slaps Rs 10 Lakh Fine On Individual In DHFL Insider Trading Case
India’s markets regulator has imposed a penalty of Rs 10 lakh on an individual for indulging in insider trading of shares of Dewan Housing Finance Corp. Ltd. in 2019.
Amit Ramesh Sawhney was observed to be in professional and personal relationship with the promoters and directors of DHFL, according to the Securities and Exchange Board of India.
SEBI found that Sawhney had on Jan. 29, 2019, liquidated his entire holding in DHFL, just before Cobrapost.com reported a major scam at DHFL involving promoters. By selling his entire shareholding, he avoided losses worth more than Rs 27,000, the capital markets regulator said in an order passed Wednesday.
Cobrapost had alleged that DHFL siphoned off Rs 31,000 crore into promoter-linked companies to create private wealth through a network of shell companies. The report was price-sensitive, as it caused the DHFL stock to tank 8.22% on Jan. 29, SEBI said.
The regulator noted that before the press conference, Cobrapost had sent an email to DHFL and its promoters with a set of questions. In the email, it was also mentioned that they were going to break the story on the scam.
“Noticee (Sawhney) had sold his entire holding in DHFL, i.e. 12,497 shares, on January 29, 2019 at a weighted average price of Rs 171.92 per share (approx.) prior to press conference of Cobrapost and post his two phone calls with the secretary to the chairman and MD of DHFL, who also admittedly had access to the email from Cobrapost,” SEBI said.
The regulator noted that Sawhney was in constant touch with promoters as well as the key managerial persons of DHFL, who were in possession of the unpublished price sensitive information.
"The noticee being an insider, traded in the scrip of DHFL during the period of UPSI and, thus, violated the provisions... of PIT (Prohibition of Insider Trading) Regulations," SEBI said, while imposing the fine of Rs 10 lakh.