Mumbai: SEBI on Monday extended capital markets ban imposed on four entities by five years for their failure to disgorge an amount within the stipulated time as ordered by the regulator in a case related to insider trading.
The direction against -- Hemant R Patel, Hemant Patel (HUF), Priyanka Singhvi and Anita Ravichandra -- was today communicated by the Securities and Exchange Board of India (SEBI) to stock exchanges -- NSE and BSE.
In a July 24 order, this year, the four entities were barred by SEBI, for a period of 10 years, from the securities markets for violating 'Prohibition of Insider Trading' norms while dealing in shares of KLG Capital.
Further, in the order, the regulator had asked these entities to pay an amount of about Rs 3 crore which included unlawful gains made by them through transaction in KLG Capital shares and a interest of 12 percent, within 45 days, failing which they would be banned for a further period of 5 years.
"As confirmed by SEBI vide their e-mail dated September 8, 2014, there is no intimation about the disgorgement amount," BSE said in a circular today.
"Hence, the debarment period for the...4 entities has now been extended for a further period of 5 years," they added.
Referring to SEBI intimation, NSE in its cirular said said that the entities "had not complied with the directions as mentioned in the (regulator's) order".
"Members are advised to take note of the above and ensure compliance," the exchange added.
According to BSE, the ban would come into force "with immediate effect".
The market regulator upon receipt of alerts in the scrip of KLG Capital had conducted an analysis of the trading activity in the scrip.
From the same, it was revealed that during February 22, 2008 to February 27, 2008, Awaita Properties had acquired 17.11 lakh shares of KLG Capital through market transactions.
Such acquisition had increased the shareholding of Awaita to 60.46 percent and the same was disclosed by KLG to BSE on February 28, 2008.
Thereafter, Awaita had made a public announcement dated March 3, 2008 to acquire another 20 percent shares of KLG.
The probe found that the certain entities had bought substantial number of KLG shares, based on the UPSI, relating to the impending acquisition by Awaita.
