Individual settles insider trading case with Sebi, pays Rs 1.12 cr settlement charges

Pratibha Khandelwal Advani has settled the case that pertained to violation of PIT (Prohibition of Insider Trading) Regulations. The watchdog had conducted an investigation into the trading in the shares of NIIT Technologies during the December 22, 2014 to March 23, 2015 period, according to a Sebi order.

An individual has settled with markets regulator Sebi an alleged insider trading case in the shares of NIIT Technologies back in 2015, after paying Rs 1.12 crore towards settlement charges. Pratibha Khandelwal Advani has settled the case that pertained to violation of PIT (Prohibition of Insider Trading) Regulations.

The watchdog had conducted an investigation into the trading in the shares of NIIT Technologies during the December 22, 2014 to March 23, 2015 period, according to a Sebi order. It was revealed that there was a substantial spurt in the volume of the company's shares on March 12, 2015. On that day, the company said it does not have any information to share with stock exchanges.

Later, on March 23, 2015, the company made an announcement to the stock exchanges that a dispute has arisen between one of the company's subsidiaries and one of its clients, which may result in claims and counter claims, and that the company has provisioned USD 10 million in this regard, the order said. Thereafter, it was observed that the share price fell by 6.37 per cent on the BSE and 5.96 per cent on the NSE on the very next day of the announcement.

According to the Sebi order, one of the agenda items during the meeting of the company on January 14, 2015 was on considering an infusion of USD 10 million. NIIT confirmed that Advani was privy to the aforesaid price sensitive information in her official capacity as chief financial officer of the company, the order noted.

It was found that the applicant sold 25,000 shares of the company during the UPSI (Unpublished Price Sensitive Information) period. By selling shares during this period, the individual avoided a loss of Rs 13.69 lakh, as per the order. The individual paid Rs 89.50 lakh towards settlement fee along with an interest amount of Rs 13.69 lakh and Rs 9 lakh at the rate of 12 per annum towards disgorgement of the alleged ill-gotten gains. It was interest payable from February 25, 2015 till the date of submission of Revised Settlement Terms, which was August 19, 2020 at the rate of 12 per cent per year.