Sebi bars 8 entities from stock markets
image for illustrative purpose
New Delhi Sebi has barred eight entities from the securities market for indulging in insider trading activities in the shares of Infosys.While imposing the ban till further orders on the eight entities, the watchdog also directed impounding illegal gains worth Rs 3.06 crore from two of them - Capital One Partners and Tesora Capital. The entities have traded in the scrip of Infosys while in possession of Unpublished Price Sensitive Information (UPSI) pertaining to Infosys' financial results for the quarter ended June 30, 2020, Sebi said in an interim order.
Capital One and its working partners - Amit Bhutra and Bharath C Jain - as well as Tesora Capital and its working partners - Amit Bhutra, Ankush Bhutra and Manish Champalal Jain - have been barred from the securities market.
Besides, Pranshu Bhutra, Senior Corporate Counsel of Infosys and Venkata Subramaniam V V, Senior Principal, Corporate Accounting Group of the company, have been barred, as per the order. Sebi, prima facie, found that Capital One and Tesora had traded in the scrip of Infosys in the F&O (Futures & Options) segment just prior to announcement of financial results for the quarter ended June 30, 2020, and soon after the announcement, they offloaded or squared off their positions such that net positions were zero. Amit Bhutra and Bharath C Jain had placed orders on behalf of Capital One. In addition, Amit Bhutra, who is also a working partner at Tesora Capital, had given trading instructions on behalf of Tesora.
By indulging in such trades, Capital One Partners and Tesora Capital had made illegal gains to the tune of Rs 2.79 crore and Rs 26.82 lakh, respectively, according to Sebi.
While Capital One and Tesora regularly traded in a variety of scrips, during the period from January-October, 2020, it has been observed that the entities had significant trading activity in the scrip of Infosys only during the weeks adjacent/ close to the dates of corporate announcement of financial results for the quarters ended December 2019, March 2020, June 2020 and September 2020.
The trading concentration of Capital One and Tesora Capital in the scrip of Infosys had increased drastically during such time. Thus, the two companies have the same repetitive pattern of trading in the scrip of Infosys during periods close to the announcement of financial results, Sebi noted.
While the matter is still under full examination, it appeared, on preponderance of probability basis, that insider trading may have been carried out, related to other three quarter financial results as well, it added.
Sebi noted that Capital One, Tesora Capital, Amit Bhutra, Ankush Bhutra and Manish Champalal Jain had prime facie violated the provision of PIT (Prohibition of Insider Trading) Regulations. Amit Bhutra is connected with Pranshu Bhutra through frequent telephonic communication.
