Piramal Capital Ex-MD Khushru Jijina, His wife and Greatdeal Finconsult Advisors Pay Rs44 Crore To Settle Insider Trading Case

Moneylife Digital Team 26 July 2024

Investor Interest

Piramal Capital Housing Finance Ltd (PCHFL)'s former managing director (MD) Khushru Jijina, his wife Benaifer and Greatdeal Finconsult Advisors LLP paid Rs43.55 crore to settle a case of insider trading in the scrip of Piramal Enterprises Ltd (PEL). The settlement amount includes disgorgement of unlawful gains worth Rs15.32 crore and Rs9.41 crore as interest at 12%pa (per annum).

The settlement order was passed by Dr Anitha Anoon, chief general manager (CGM) of the Securities and Exchange Board of India (SEBI).

SEBI had conducted an investigation into the scrip of Piramal Enterprises to ascertain whether trading by certain entities was undertaken while having access to unpublished price-sensitive information (UPSI) related to the company's financial results in violation of insider trading rules. The investigation period was from April 2018 to May 2019.

The probe revealed that Mr Jijina, in his capacity as MD of PCHFL, was in possession of UPSI relating to the financial results of PEL for the quarter ending June 2018.

Mr Jijina, a designated partner in Greatdeal Finconsult Advisors LLP, availed a loan of Rs212.51 crore from Piramal Welfare Trust (PWT). PWT is a private discretionary trust where any benefits or rewards to be given are decided by authorised representatives of Piramal Corporate Services Pvt Ltd (PCSPL). Mr Jijina was one of the authorised representatives of PCSPL.

Greatdeal Finconsult Advisors, managed by Ms Jijina, the wife of Mr Jijina, used the loan to buy shares of PEL worth Rs211.23 crore before the publication of UPSI relating to the financial performance of PEL.

According to SEBI, the Jijinas and Greatdeal Finconsult Advisors were in possession of UPSI related to the financial performance of PEL for the quarter ending June 2018. Greatdeal Finconsult Advisors traded in the scrip of PEL while possessing such UPSI and made unlawful gains of Rs15.32 crore.

By doing these activities, the Jijinas and Greatdeal Finconsult Advisors allegedly flouted the insider trading norms, SEBI says. It then issued show-cause notices to the three.

On 18 July 2023, the Jijinas and Greatdeal Finconsult Advisors proposed a settlement by applying without admitting or denying SEBI findings.

The authorised representatives of the three met with the internal committee (IC) of SEBI on 22 August 2023, in which the settlement terms were deliberated. After considering the facts of the matter, the IC allowed the authorised representatives to submit revised settlement applications.

However, after considering the revised settlement terms, SEBI's high-powered advisory committee (HPAC) asked the IC to reconsider the proposal. On 17 January 2024, the IC proposed revised terms, including a payment of Rs43.55 crore by the Jijinas and Greatdeal Finconsult Advisors and a voluntary debarment for six months for Greatdeal Finconsult Advisors.

Subsequently, the HPAC, in its meeting on 4 March 2024, considered the revised settlement terms proposed by the three subject to voluntary debarment of six months for the Jijinas as well.

The panel of whole-time members (WTM) of SEBI approved and accepted the recommendation of the HPAC on 21 May 2024. As per instructions from SEBI, on 9 July 2024 the Jijinas and Greatdeal Finconsult Advisors informed about the settlement and disgorgement amount remittance.

However, the CGM clarified that the settlement order is without prejudice to SEBI's right to take enforcement actions, in terms of regulation 28 of the SEBI (Settlement Proceedings) Regulations, 2018, including restoring or initiating the proceedings against the three.

Comments

User

varun.sidana33

11 months ago

What a misuse of the position. Imagine the MD himself has done all this. He and his wife have gone ahead and settled Rs 44 cr..not a small number. Imagine how much money they would have made to spare Rs 44 cr...
Did some google search.. the lady in question used to work at another securities firm..