Sebi on Monday confirmed its earlier directive passed against five persons wherein they were barred from the securities market for indulging in insider trading in the scrip of Zee Entertainment Enterprises Ltd.
"Bijal Shah, Gopal Ritolia, Jatin Chawla, Gomti Devi Ritolia and Daljit Chawla are restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever until further orders," Sebi said in its 43-page confirmatory order.
However, they have been allowed to buy and sell units of mutual funds.
The regulator said a detailed investigation in the matter is in progress which may bring out additional roles of omission or commission, of these five persons, if any, in detail.
Sebi will pass a separate order after giving an opportunity of hearing to the other entities who are not covered in the interim order but against whom the interim order has been passed.
The latest direction comes after the watchdog, through an interim in August, barred 15 entities, including these five individuals, from the securities markets for indulging in insider trading in the shares of Zee.
The regulator had found that a group of connected or related entities had taken long position in the shares in the cash and derivatives segments.
Following the announcement of first quarter results of FY 2020, the entities had squared off the long positions and generated huge profits.
Sebi also found that Bijal Shah, who was head of the financial planning and analysis, strategy and investor relations at Zee, at the time of violation, had prima facie, passed on the UPSI to Gopal Ritolia, who was director at UBS India at the time of violation, and Jatin Chawla, ex-director at Credit Suisse and currently director at First Voyagers Advisors.
On the basis of and while in possession of Unpublished Price Sensitive Information (UPSI), these two persons took substantial long positions in the scrip of Zee, starting from August 11, 2020, before the announcement of the financial results, in the trading accounts of their respective mothers.
Further, Jatin Chawla had passed on the UPSI to certain persons.
In its latest order, Sebi said the prima facie findings in the interim that Bijal Shah and Jatin Chawla pursuant to a modus operandi communicated the UPSI in the scrip of Zee resulting in prima facie violation of PIT (Prohibition of Insider Trading) norms stand confirmed.
It, further, said that Gopal Ritolia and Jatin Chawla have traded in the scrip while in possession of and on the basis of the UPSI resulting in the prima facie of contravention of PIT Regulations.
"Furthermore, the prima facie findings in the interim order... that Gomti Devi Ritolia and Daljit Chawla have prima facie indirectly engaged in insider trading activities and have also prima facie indirectly dealt in securities while in possession of material non-public information resulting in prima facie violation of... of Sebi Act, stand confirmed," Sebi said.
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