Sebi slaps Rs 10 lakh fine on individual for insider trading in DHFL shares

Markets regulator Sebi has imposed a penalty of Rs 10 lakh on an individual for indulging in insider trading in the shares of Dewan Housing Finance Ltd (DHFL) last year. Amit Ramesh Sawhney was observed to be in professional and personal relationship with the promoters and directors of DHFL, Sebi noted.

The regulator found that Sawhney had liquidated his entire holding in DHFL on January 29, 2019, prior to breaking of a story related to a major scam involving DHFL's promoters, by portal Cobrapost.com at a press conference, according to a Sebi order. By selling the shares, he avoided losses to the tune of over Rs 27 lakh, the regulator said in the order passed on Wednesday.

During the press conference, Cobrapost alleged that DHFL had siphoned off Rs 31,000 crore into promoter companies to create private wealth through a network of shell companies. The allegation, being serious in nature, was a price sensitive information which led to fall in the price of the scrip by 8.22 per cent on January 29, 2019, as per Sebi.

The regulator noted that before the press conference, Cobrapost had sent an e-mail to DHFL and its promoter with a set of questions. In the e-mail, it was also mentioned that they were going to break the story on scam. "Noticee (Sawhney) had sold his entire holding in DHFL ie. 12,497 shares on January 29, 2019 at a weighted average price of Rs 171.92 per share (approx.) prior to press conference of Cobrapost and post his two phone calls with the secretary to the chairman and MD of DHFL, who also admittedly had access to the e-mail from Cobrapost," Sebi said.

The regulator noted that Sawhney was in constant touch and had frequent communication with promoters as well as the key managerial persons of DHFL, who were in possession of the Unpublished Price Sensitive Information (UPSI). "The noticee being an insider, traded in the scrip of DHFL during the period of UPSI and, thus, violated the provisions... of PIT (Prohibition of Insider Trading) Regulations," Sebi said while imposing the fine of Rs 10 lakh.