Sebi Orders Promoter to Disgorge Profits from Insider Trading in Mawana Sugars

India's capital markets regulator, Sebi, has directed a promoter of Mawana Sugars to return Rs 6.17 crore gained through insider trading. The probe revealed that Siddharth Shriram had engaged in trading with unpublished price-sensitive information, and following his death, legal heir Krishna Shriram was asked to repay the amount with interest.

In a significant regulatory action, the Securities and Exchange Board of India (Sebi) directed one promoter of Mawana Sugars to return Rs 6.17 crore gained through insider trading activities. The enforcement action came following an investigation into trading activities by Siddharth Shriram, a promoter and special advisor of Mawana Sugars Ltd (MSL), spanning from September 2017 to February 2018.

The probe revealed that Shriram had engaged in trading while possessing unpublished price-sensitive information, thereby violating market norms and Insider Trading rules. After his demise in May 2021, the responsibility of repaying the unjust gains was transferred to his legal heir, Krishna Shriram, who is currently the Chairman of the Board of MSL.

Sebi has stipulated that Krishna Shriram must repay the amount within 45 days with an annual interest of 12%, failing which interest accumulation will continue till payment is fulfilled. The disgorged amount will be credited to the Investor Education and Protection Fund as per regulatory guidelines.

(With inputs from agencies.)