Sebi today barred seven entities, including former promoters, from the securities market for five years and directed them to disgorge illegal gains worth over Rs 95 lakh in the case of alleged insider trading in the shares of erstwhile Bank of Rajasthan.
Bank of Rajasthan (BoR) is now merged with ICICI Bank.
To check possible violation of insider trading norms, the regulator had conducted an investigation into the movement of BoR shares from May 7-18, 2010. This period -- which was prior to the announcement of an agreement between the dominant shareholders of BoR and ICICI Bank Ltd for a merger -- witnessed considerable price and volume movement.
In the matter, the watchdog had passed an interim order against the seven entities in January 2016.
Passing the final order, Sebi has imposed a five-year ban on Rohit Premkumar Gupta, Sanjay Kumar Tayal, Navin Kumar Tayal, Jyotika Sanjay Tayal, Advik Textiles and Realpro Pvt Ltd, Kulwinder Kumar Nayyar and Azam Mohmmed Ashan Shaikh.
According to Sebi, Sanjay Kumar Tayal, Navin Kumar Tayal, Jyotika Sanjay Tayal were the dominant shareholders at the relevant time.
In its 32-page order, Sebi has also ordered the seven entities to "jointly and severally disgorge an amount of Rs 95,77,614... along with interest calculated at the rate of 12 per cent per annum from May 27, 2010 onwards".
Sebi Whole Time Member G Mahalingam said that he is inclined to believe that Rohit who carried out insider trading was able to do it because of the support received from the Tayals.
It is reiterated that despite the changes in the directorship and shareholding of Advik, the affairs of Advik were effectively controlled by Tayals namely, Sanjay, Jyotika and Navin, he noted.
"Insiders ought to trade and share information, with a great degree of care and caution, as information asymmetry leads to a lot of market manipulation and illegal gains in the hands of a few insiders...," the order said.
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