SEBI fines 2 persons in WhatsApp leak case

WhatsApp chats extracted from the seized devices were examined further and while examining the chats, it was found that earnings data and other financial information of around 12 companies were leaked in WhatsApp messages.

April 29, 2020 / 09:41 PM IST
 
 
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Markets regulator Sebi on Wednesday imposed a penalty of Rs 30 lakh on two persons for circulating unpublished price sensitive information pertaining to quarterly results of Bajaj Auto through WhatsApp prior to official announcement by the company. In an order, the regulator levied a fine of Rs 15 lakh each on Neeraj Kumar Agarwal and Shruti Vishal Vora.

Some news reports had referred to the circulation of Unpublished Price Sensitive Information (UPSI) in various private WhatsApp groups about certain companies ahead of their official announcements to the respective stock exchanges.

Against this backdrop, Sebi initiated a preliminary examination in the matter during which search and seizure operation for 26 entities of WhatsApp Group were conducted and about 190 devices, records, among others, were seized.

WhatsApp chats extracted from the seized devices were examined further and while examining the chats, it was found that earnings data and other financial information of around 12 companies were leaked in WhatsApp messages.

Bajaj Auto was one of the firms whose quarterly financial results for the fourth quarter of 2016-17 closely matched with the messages circulated in WhatsApp chats.

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Accordingly, the regulator carried out an investigation in the matter of circulation of UPSI through WhatsApp messages with respect to Bajaj Auto to ascertain any possible violation of the PIT (Prohibition of Insider Trading) Regulations during the period April 1, 2017 and May 18, 2017.

It found that Agarwal and Vora being insiders had communicated the UPSI relating to Bajaj Auto Ltd to other person(s) through WhatsApp messages, which is in violation of the provisions of PIT Regulations.

Sebi said that messages about the financial results were circulated prior to the official announcement made by the company.

As per the PIT norms, any person who is in possession of UPSI is regarded as an insider.
PTI
first published: Apr 29, 2020 09:40 pm

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