SEBI Notices Venugopal Dhoot: Pay ₹1 Crore in 15 Days or Face Arrest!

Koushik Roy

SEBI Notices Venugopal Dhoot: Pay ₹1 Crore in 15 Days or Face Arrest!

SEBI Imposes Ban on Venugopal Dhoot and Other Entities for Insider Trading

The Securities and Exchange Board of India (SEBI) has imposed a significant ban on industrialist Venugopal Dhoot, alongside two other entities, in connection with insider trading activities involving Videocon Industries. A notice has been issued demanding payment of approximately Rs 1.03 crore for their illicit trading actions. SEBI has cautioned that failure to remit this amount within 15 days could result in arrest, as well as the attachment of their bank accounts and assets.

Background of the Case

In addition to Dhoot, the notice has been sent to Electroparts (India) Pvt Ltd and Videocon Realty & Infrastructures. The parties involved had failed to comply with the SEBI fine imposed back in September 2021, which led to the issuance of these demand notices for payment.

Details of Insider Trading

   

Insider trading activities surrounding Videocon’s securities occurred in 2017, with SEBI imposing a collective fine of Rs 75 lakh on Dhoot and the two associated promoters for their actions. The regulatory authority identified that Dhoot, along with Electroparts and Videocon Realty, acted on Unpublished Price Sensitive Information (UPSI) regarding the company.

What Was the Insider Information?

The crucial information that facilitated insider trading was related to the classification of Videocon’s loan account as a Non-Performing Asset (NPA) by Dena Bank. This development was viewed as material information that could impact the share prices of Videocon Industries. The UPSI period was defined as spanning from March 1, 2017, to May 9, 2017. During this time, the promoter entities either pledged or transferred their shares in Videocon to other entities, leveraging the sensitive information to their advantage.

Consequences of Non-Compliance

If Venugopal Dhoot and the other entities do not comply with the payment order, they face severe repercussions, including possible arrest and the freezing of their financial assets. This growing trend of regulatory scrutiny highlights the importance of adhering to insider trading laws, aiming to promote transparency and fairness in the capital markets.

Conclusion

This case serves as a potent reminder of the legal ramifications associated with insider trading and the responsibilities that come with being an insider in a publicly traded company. As regulatory bodies like SEBI tighten their noose around such malpractices, stakeholders in the market are urged to remain compliant with trading regulations to avoid facing similar penalties.