Sebi penalises individual for breaching insider rules, Retail News, ET Retail

New Delhi: Sebi on Friday imposed a penalty of Rs 12 lakh on an individual for breaching insider trading regulations in the matter of Parag Milk Foods Ltd (Parag). The regulator slapped a fine of Rs 12 lakh on Shashi Kant Dalmia and directed him to pay the penalty within 45 days of this order.

The order came after Sebi had conducted an investigation for the period January-April 2018 to ascertain whether any entity has prima-facie violated the provisions of PIT (Prohibition of Insider Trading) rules while trading in the scrip of Parag.

The regulator found that Dalmia was a designated employee or an insider of Parag and therefore executed trades while in possession of unpublished price-sensitive information (UPSI), thereby flouting the PIT regulations.

The UPSI period was from January 23, 2018, to April 18, 2018.

It also noted that Dalmia despite being a designated person of Parag had traded in the shares of the firm with a threshold value exceeding Rs 5 lakh without taking pre-clearance of trades from the compliance officer of the firm.

Under the rules, any designated person/employee doing trade in any scrip with a threshold value of more than Rs 5 lakh should obtain pre-clearance of the trade from the compliance officer of the company before executing the trade.

Therefore, Dalmia failed to exercise reasonable care and diligence while dealing with the scrip of Parag, thereby violating the Minimum Standards of Code of Conduct of PIT regulations.