Spank Management Services and Patanjali Govind Keswani have settled with markets regulator Sebi a case pertaining to alleged insider trading in the shares of Varun Beverages after paying Rs 73 lakh.
The order came after the two applicants proposed to settle the alleged violations of insider trading rules, "without admitting or denying the findings" through a settlement order.
"Pending enforcement proceedings for the alleged defaults ...are settled qua the applicants (Spank and Keswani), the Securities and Exchange Board of India (Sebi) said in its order on Monday.
The applicants paid a total amount of Rs 73 lakh, which comprises Rs 50.7 lakh as settlement amount, Rs 14.58 lakh as disgorgement amount and Rs 7.55 lakh as an interest.
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The regulator had conducted an investigation in the matter to ascertain whether certain entities have traded in the scrip of Varun Beverages Ltd (VBL) during the period of December 21, 2017 to January 4, 2018 on the basis of Unpublished Price Sensitive Information (UPSI) pertaining to VBL entering into strategic partnership with PepsiCo India for sale and distribution of the larger Tropicana portfolio.
Based on the findings of the investigation, enforcement proceedings were initiated against the applicants through a Show Cause Notice (SCN) in November 2021 for the alleged violations of insider trading rules.
As per SCN, Spank, which is owned by Keswani, traded in the scrip of VBL on January 2, 2018, besides, he was alleged to have engaged in trading through Spank in the scrip of VBL while in possession of UPSI and made wrongful gain of Rs 14.58 lakh.
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Spank and Keswani were alleged to have violated the provisions of Sebi's insider trading rules.
Keswani was connected professionally with Ravi Kant Jaipuria, chairman of VBL. Jaipuria was an insider and in possession of UPSI. On account of the same, Keswani was alleged to be an insider under the rules and in possession of UPSI which would have been communicated to him by Jaipuria.
Pending adjudication proceedings, two entities proposed to settle the case. Following this, Sebi recommended that the adjudication proceedings initiated against the applicants may be settled on payment of Rs 73 lakh towards the settlement amount and consequently, they remitted the amount and settled the case with the markets regulator.
Last month, Jaipuria had settled with Sebi the case related to alleged violations of insider trading rules in Varun Beverages matter.
In a separate settlement order on Monday, Kunj Deep Kalra has settled with Sebi a case related to alleged violations of insider trading rules after paying Rs 3 lakh towards settlement amount.
Kalra was the non-executive woman director on the board of directors of Indian Sucrose Ltd from August 2014 till September 2020.
During May 9-24, 2018, Kalra had cumulatively acquired Indian Sucrose shares worth Rs 22.89 lakh through open markets and had cumulatively sold the company's shares worth Rs 16.92 lakh during March 7-19, 2020, as per the order.
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Since, the aggregate value of the securities traded exceeded Rs 10 lakh on both occasions, Kalra was required to make disclosures of the transactions to the company within two trading days under the insider trading rules. However, the disclosure was allegedly made with a delay on both occasions.
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