The share price of Lux Industries Ltd hit a 20 percent lower circuit after its executive director was banned for insider trading, raising concerns over corporate governance at the company.
The stock hit a low of Rs 2,808.30 on BSE, down 20 percent from its previous day’s close.
On January 24, the market regulator Securities Exchange Board of India barred 14 entities for insider trading and ordered impounding of “ill-gotten gains” worth Rs 2.94 crore in the matter of Lux Industries.
The people who were banned include Udit Todi who is an executive director in the firm and is the son of the managing director.
"Pursuant to the announcement, the scrip of the company registered a price rise by 40.75 percent on close to close basis within three consecutive trading days. On an analysis of the alerts on the announcement related to financial results, Sebi found that a group of connected/ related entities were observed to have taken long positions in the scrip. Subsequently, the entities squared off the said long positions, thereby generating substantial profits", a PTI report said.
Investors are now waiting for the December quarter earnings to be announced on February 3.
Recently, PTC India Financial Services stock plummeted after three independent directors resigned and raised concerns over corporate governance standards at the company.
Kamlesh Vikamsey, Thomas Mathew and Santosh Nayar had resigned with immediate effect, raising concerns around the handling of the appointment of Ratnesh as the finance director and the chief financial officer.
The independent directors alleged that the chairman and managing director Rajib Kumar Mishra “did not allow” Ratnesh to join and discharge his duties.
Recently, marketing consultant Rama Bijapurkar resigned as an independent director of ICICI Bank on January 23 and now faces an insider trading probe for violation of the bank's code and SEBI regulations.
Bijapurkar told Moneycontrol in an interview that the purchase of ICICI Bank shares was due to an “inadvertent error.”
Bijapurkar’s independent financial adviser purchased 4,900 shares of ICICI Bank in her account on January 5 “without prior intimation to her” when the trading window was closed for company’s insiders ahead of the December quarter results.
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