Former Executive Director of Axis Capital Ashish Anup Nigam and an associate Nehal Milan Mehta have paid Rs 55.9 lakh and more than Rs 94 lakh respectively, and have agreed to voluntary debarment from the securities market for six months to settle allegations of violating provisions of the Prohibition of Insider Trading (PIT) Regulations.
In a settlement order issued on April 11, the Securities and Exchange Board of India (SEBI) stated that both of them had filed a settlement application in November 2024 and that the regulator's department had confirmed receipt of the settlement amounts on April 9.
According to the order, the regulator had conducted an investigation into whether Mehta had traded in the scrip of BF Investment Limited while in possession of Unpublished Price Sensitive Information (UPSI). The investigation period was from September 4, 2022 to March 20, 2023.
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The UPSI was the announcement made by BF Investment Limited which was published on the stock exchanges i.e. BSE and NSE on December 30, 2022, wherein the company had informed the exchanges regarding receipt of Initial Public Announcement from Axis Capital Limited (Manager to the Offer), expressing the intention of DGM Realities Private Limited, Ajinkya Investment and Trading Company and Sundaram Trading and Investment Private Limited (the ‘Acquirer Group’) to (a) acquire all the equity shares held by public shareholders and (b) voluntarily delist the equity shares from the stock exchanges.
The order said, "The Acquirer Group were members of the Promoter and Promoter Group of the Target Company i.e. BF Investment Limited. It was observed that the aforesaid information was UPSI in terms of Regulation 2(1)(n)(iv) of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The period of UPSI was considered from December 4, 2022 to December 30, 2022."
Nigam, who was the Executive Director of Axis Capital Limited, the Manager to proposed delisting offer of BF Investment Limited was in possession of UPSI. He allegedly communicated the UPSI to Mehta, who then traded in the scrip allegedly on the basis of the USPI and made unlawful gains.
According to the order, Nigam and Mehta were connected and were in constant communication with each other during the UPSI period.
The order also noted that had not bought or sold any shares during Pre-UPSI period i.e. September 4, 2022 to December 3, 2022 in the equity segment.
The order added, "During the UPSI period, he had traded only in the scrip of BF Investment Limited. In the Post-UPSI period, he had traded in total 3 scrips including BF Investment Limited. However, 92.1% of his trading activities (in terms of gross traded value) were in the scrip of BF Investment Limited and only 7.9% in other scrips in the Post-UPSI period."
After a showcause notice was sent to Nigam and Mehta, they filed applications to settle the proceedings without admitting or denying the allegations.
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