Infibeam Avenues Insider Trading: SEBI Bars 3 Entities from Markets for 1 Year, Imposes Penalty of Rs15 Lakh on Each
Moneylife Digital Team 29 April 2021
Market regulator Securities and Exchange Board of India (SEBI) has banned three entities -Shah Dhiren Mahendrakumar (HUF), Amee Dhiren Shah and Affluence Fincon Service Pvt Ltd from the markets for one year for indulging in insider trading in the shares of Infibeam Avenues Ltd (IAL). SEBI has also imposed a penalty of Rs15 lakh on each of the three entities. HUF stands for hindu undivided family.
Further, they have been restrained from buying, selling or otherwise dealing in securities of IAL directly or indirectly, in any manner for a period of two years.
The order also says that the amount of Rs2.61 crore that has been kept as fixed deposit (FD) by the entities with SEBI, "along with interest accrued thereon, stands disgorged and shall be remitted to Investor Protection and Education Fund (IPEF)".
SEBI’s investigation into shares of IAL for the November 2016 to June 2017 period revealed that the three entities, collectively called Dhiren Group, made wrongful gains by trading in the scrip of IAL while in possession of unpublished price sensitive information (UPSI) pertaining to stock split. All three entities were also found to be connected to the promoters, directors or key management personnel of IAL and thus had access to UPSI. 
Trading in shares of a company while in possession of UPSI of the same violates provisions of PIT (Prohibition of Insider Trading) Regulations. SEBI’s probe found that during the UPSI period, Dhiren Group had bought total 8.32 lakh shares worth Rs81.29 crore and sold 3 lakh shares to the tune of Rs30.19 crore. During post-UPSI period, the group sold 2.55 lakh shares worth Rs32.98 crore.
SEBI noted that the entities indulged in such trading and violated the provision of insider trading norms while unlawful gains by violating the provisions of securities laws.
SEBI’s show cause notice (SCN) had alleged that the three entities had collectively made unlawful gains of Rs2.61 crore. 
SEBI’s adjudicating officer Ananta Barua noted “Once it is established that an insider when in possession of UPSI has traded in the securities then it is a natural inference that such trades were based on the UPSI.” 
He also observed “when a person who has traded in securities has been in possession of unpublished price sensitive information, his trades would be presumed to have been motivated by the knowledge and awareness of such information in his possession”. 
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