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Fenton Investments and Arvind Singhania on Monday settled with markets regulator Sebi a case pertaining to alleged insider trading in the shares of Varun Beverages after paying Rs 63 lakh.
The two applicants proposed to settle the alleged violations of insider trading rules "without admitting or denying the findings" through a settlement order.
"Pending enforcement proceedings for the alleged defaults ...are settled qua the applicants (Fenton and Singhania)," the Securities and Exchange Board of India (Sebi) said in its order.
The applicants paid a total amount of Rs 63 lakh, which comprised Rs 45.5 lakh as settlement amount, Rs 11.43 lakh as disgorgement amount and Rs 5.93 lakh as interest.
The regulator had conducted an investigation to ascertain whether certain entities traded in the scrip of Varun Beverages Ltd (VBL) during December 21, 2017 to January 4, 2018 on the basis of Unpublished Price Sensitive Information (UPSI) related to the company entering into a strategic partnership with PepsiCo India for sale and distribution of the larger Tropicana portfolio.
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Based on the findings of the investigation, enforcement proceedings were initiated against the applicants through a Show Cause Notice (SCN) in November 2021 for the alleged violations of insider trading rules.
As per the SCN, Fenton allegedly traded in the scrip of VBL on December 28, 2017. Singhania, a director at Fenton, was alleged to have engaged in trading through Fenton in the scrip of VBL while in possession of UPSI and made notional wrongful gain of Rs 11.43 lakh.
Through such acts, the two applicants allegedly violated the provisions of the insider trading rules, as per the order.
Singhania was connected professionally with VBL Chairman Ravi Kant Jaipuria, who was in possession of UPSI. It was also noted in the SCN that during the period of December 27, 2017 to January 2, 2018, Singhania and Jaipuria were in Bangkok.
Pending adjudication proceedings, two entities proposed to settle the case. Following this, Sebi recommended that the adjudication proceedings initiated against the applicants may be settled on payment of Rs 63 lakh towards the settlement amount. Consequently, they remitted the amount and settled the case with the markets regulator.
Earlier, Jaipuria, Spank Management Services and Patanjali Govind Keswani had settled with Sebi the case related to alleged violations of insider trading rules in the Varun Beverages matter.
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