Sebi: Sebi fines Abhijit Pawar Rs 10 lakhs for alleged insider trading
The case relates to an alert Sebi had received relating to insider trading by certain entities in the scrip of Magma during the month of February 2021.
A preliminary examination by Sebi revealed that Magma had made an announcement on February 10, 2021 on stock exchanges regarding the acquisition of controlling stake by Poonawalla Group in Magma.
The acquisition by Poonawalla Group was to be made through a preferential allotment by infusing fresh capital of Rs 3,456 crores in Magma.
The information regarding acquisition of controlling stake in Magma by Poonawalla Group was an unpublished price sensitive information (UPSI), which had originated on January 11, 2021, and came into the public domain on February 10, 2021.
The regulator said Abhay Bhutada, the then MD& CEO of Poonawalla Finance Pvt Ltd, had access to the UPSI, since he was involved in the deal pertaining to investment of Poonawalla Group in Magma. It was prima facie found that Bhutada had passed on the information to certain other entities, Sebi said.
“There were several phone calls between Abhay Bhutada on the one side and Saumil Shah, Rakesh Bhojgadhiya and Abhijit Pawar on the other side, during the UPSI period,” Sebi said.“Further, Abhay Bhutada and Rakesh Bhojgadhiya had known each other for many years and both of them shared certain commercial relationships over the years. Similarly, there were financial transactions between Abhay Bhutada and Abhijit Pawar,” said the regulator.
It said Pawar indulged in insider trading in the shares of Magma by passing on UPSI to Rakesh Bhojgadhiya.
Sebi alleged Pawar was in frequent communication with Rakesh Bhojgadhiya, who was the CEO of Sakal Money, which was owned by Pawar.
Bhojgadhiya and his HUF (Hindu undivided family) purchased shares of Magma during the UPSI period by using funds provided by Pawar and his wife. Bhojgadhiya earned hefty profits by quickly selling shares of Magma after the UPSI became public. Thereafter, Bhojgadhiya returned the funds to Pawar and his wife, Sebi said in its order.