Taurus Asset Management Company has settled with markets regulator Sebi a case of alleged fraudulent trading activities by paying nearly Rs 1.95 crore as settlement charges.
The matter pertained to exposure of Taurus's four schemes to the debt securities of Ballarpur Industries Ltd (BILT), which had defaulted on payments in February 2017.
It was alleged that Taurus had made a redemption request for their own investment in one of their funds before BILT defaulted on payments and that was cancelled later on. By cancelling the redemption request, it was alleged that Taurus had given themselves a special treatment which would not have been available to other investors, as per Sebi.
"It is thus alleged that the applicant (Taurus Asset Management Company) had resorted to fraudulent and unfair trade practice violating principles of fair valuation and investment valuation norms... and thus failed to exercise proper due diligence," it noted.
A show-cause notice was issued to Taurus on September 30, 2019.
Later, Taurus filed a settlement application, and in March revised settlement terms were submitted.
According to Sebi, Taurus also submitted that there were no complaints by the unit-holders with regard to the particular matter in respect of the various mutual fund schemes. Further, Taurus said it has already compensated the unit-holders of the affected mutual fund schemes to the tune of Rs 9,63,883.
In addition, it was submitted that the settlement amount of Rs 1,94,82,201 would be paid out of the funds of the applicant and that the liability would not be passed on to the unit-holders, as per the regulator.
On May 29, Sebi's High Powered Advisory Committee considered the proposed settlement terms and recommended the case for settlement upon payment of the amount, the regulator said in an order dated July 23.
In a separate settlement order, three individuals -- Atul Saraogi, Sapna Saraogi and Vimala Devi Kalantri -- settled with the regulator a case of alleged violation of insider trading regulations in Saint Gobain Sekurit India Ltd (SGSIL) matter after paying an amount of Rs 88.48 lakh towards settlement fee.
It was alleged that Atul Saraogi had communicated the UPSI (unpublished price sensitive information) to his wife, Sapna Saraogi, who had traded in the scrip of SGSIL during the UPSI period, using the demat account of her mother Vimala Devi Kalantri thereby, violating PIT (Prohibition of Insider Trading) norms, Sebi said in its settlement order.
Accordingly, they have settled the case with Sebi by paying Rs 84.05 lakh along with 2.14 lakh as ill-gotten gains and with interest of Rs 2.29 lakh.
Separately, Atul Saraogi and his mother-in-law Vimala Devi settled with Sebi a case of alleged insider trading norms in the matter of Pantaloon Retail (India) Limited (PRIL) by paying a total amount of Rs 55.54 lakh towards the settlement charges.
Atul Saraogi is alleged to have traded through the account of Vimala Devi in the scrip of PRIL in the cash and futures segment while in possession of the UPSI and made a notional profit of Rs 4 lakh.
Accordingly, an amount of Rs 47.73 lakh along with Rs 4.01 lakh as ill-gotten gains and with interest of Rs 3.80 lakh has been paid by them.
Following which Sebi settled the case.