UFO Moviez promoter Kanwar settles insider trading case with Sebi

The proposal marks a departure from SEBI's 2023 approach to include these charges in total expenses

UFO Moviez India Ltd promoter Raaja Kanwar on Thursday settled with capital markets regulator Sebi a case pertaining to alleged violations of insider trading rules after paying Rs 15.92 lakh through a settlement order.

This came after Kanwar approached Sebi to settle the pending proceedings through a settlement order "without admitting or denying the findings".

"The instant adjudication proceedings initiated against the applicant vide SCN (show cause notice) dated January 20, 2022 is disposed of," the Securities and Exchange Board of India (Sebi) said in the settlement order. It was alleged that Kanwar, as the promoter and director of UFO Moviez India Ltd (UMIL), was involved in the discussions and aware of the unpublished price sensitive information (UPSI) relating to financial results of the company till the date of the public announcement.

Kanwar allegedly entered into contra trades on three occasions during the investigation period (January to June 2019), thereby violating the code of conduct of UMIL and minimum standards for code of conduct specified under insider trading rules. The trading window was closed at that time. Also, he bought shares exceeding the threshold stipulated by the company's code of conduct without obtaining pre-clearance from the firm while the trading window was open, in violation of rules.

This came after the regulator had conducted an investigation to examine whether there were any violations of the provisions of insider trading rules by certain entities in the scrip of UFO Moviez during the period January 1, 2019 to June 30, 2019. Pursuant to the investigation, the regulator had issued a show cause notice to Kanwar in January this year.

Pending the adjudication proceedings, he proposed to settle the case with the capital markets regulator and finally settled the case after paying Rs 15.92 lakh to Sebi. In a separate order, Sebi granted exemption to Mittal Business Holdings Trust from complying with the requirements of the Takeover Regulations with respect to its proposed direct and indirect acquisitions in Greenply Industries Ltd.

The exemption has been given on the ground that the proposed acquisitions were aimed at achieving efficient succession planning and for holding the controlling interest in Greenply Industries in one entity rather than spreading the holding among different individuals, which may not be in the best interest of the company. "Pursuant to the proposed acquisitions, the Acquirer Trust would directly hold in 4.76 per cent equity shares in the Target company and would indirectly exercise control of 37.58 per cent shares through Showan Investment.

"In aggregate Acquirer Trust would acquire control over 42.61 per cent equity shares of Target company (Greenply Industries)," the order noted. Also, there will be no change in control of the target company pursuant to the proposed acquisitions. The pre- and post-acquisition shareholding of the promoters will remain the same.