Piramal Capital Former MD, 2 Others Settle Insider Trading Case with Sebi by Paying Rs 43.55 Crore

Piramal Capital Housing Finance's former MD Khushru Jijina, his wife Benaifer, and Greatdeal Finconsult on Thursday settled a case of insider trading with Sebi after paying Rs 43.55 crore as settlement charges.

The matter relates to the alleged violation of insider trading rules by Jijinas and their associate firm Greatdeal Finconsult Advisors.The terms of the settlement also included the disgorgement of alleged unlawful gains of Rs 24.74 crore to be paid jointly and severally by them (which includes 12 per cent interest per annum).

Under revised settlement terms (RST), Greatdeal Finconsult Advisors LLP proposed to voluntarily abstain from the securities market for six months. The order came after applicants (Khushru, Benaifer, and Greatdeal Finconsult) proposed to settle the pending proceedings through a settlement order without "admitting or denying the findings of fact and conclusions of law".

"...it is hereby ordered that the instant proceedings initiated against the applicants for the aforesaid violations, vide SCN dated May 24, 2023, are disposed of," Sebi's Chief General Manager Anitha Anoop said in the order.

Sebi had investigated the scrip of Piramal Enterprises Ltd (PEL) to ascertain whether trading by certain entities was undertaken while having access to UPSI related to the financial results of the company in violation of insider trading rules.

The period for the investigation was from April 2018 to May 2019. The probe revealed that Khushru Jijina, in his capacity as MD of Piramal Capital Housing Finance Ltd (PCHFL), had unpublished price-sensitive information (UPSI) relating to the financial results of PEL for the quarter ending June 2018.

Khushru, a designated partner in Greatdeal Finconsult Advisors LLP, availed a loan of Rs 212.51 crore from Piramal Welfare Trust (PWT). The loan was utilised by Greatdeal to acquire shares of PEL worth Rs 211.23 crore before publication of UPSI relating to financial performance of PEL.

According to Sebi, it further alleged that the applicants were in possession of UPSI related to the financial performance of PEL for the quarter ending June 2018 and Greatdeal Finconsult traded in the scrip of PEL while in possession of such UPSI and made unlawful gains of Rs 15.32 crore.

By doing these activities, the applicants allegedly flouted the insider trading norms. Under the probe, a common Show Cause Notice (SCN), was issued by Sebi in May 2023, to Khushru and Benaifer and Greatdeal Finconsult Advisors. Benaifer was managing Greatdeal Finconsult Advisors.

Further, the applicants filed settlement applications with the regulator in terms of Sebi (Settlement Regulations). Pursuant to receipt of the applications, Sebi's High Powered Advisory Committee (HPAC) permitted the applicants to submit revised terms of settlement.

However, the HPAC considered the revised settlement terms proposed by the applicants and deferred the matter for reconsideration by the regulator's internal committee.

"Subsequently, the High Powered Advisory Committee, in its meeting held on March 04, 2024, considered the Revised Settlement Terms proposed by the applicants subject to voluntary debarment of 6 months for Applicants 2 (Benaifer Jijina) and 3 (Khushru Burjor Jijina) as well," Sebi said in the settlement order. Subsequently, the applicants paid the amount and settled the matter.