Venugopal Dhoot, 2 others fined in insider trading case

MUMBAI: Markets regulator Sebi has penalised promoters of Videocon IndustriesVenugopal Dhoot and two of his investment companies — with a total fine of Rs 75 lakh for pledging Videocon shares without proper disclosure to shareholders and also for entering into off-market transactions using inside information.
The case relates to Sebi rule violations by these entities between April and September 2017. Each of the entities have been fined Rs 25 lakh.
Interestingly, the Sebi order showed that despite sending several notices, Dhoot neither replied to them nor appeared before the regulator’s adjudication officer for the case.
Dhoot, the main promoter of the company, was also the chairman & MD. The other two entities named in the order are Videocon Realty & Infrastructures, and Electroparts (India), formerly Shree Dhoot Trading & Agencies.
“Noticees being insiders had executed off-market transactions while in possession of unpublished price sensitive information (UPSI),” Sebi said in the order.
During the period of investigation by Sebi, Dena Bank, one of the lenders to Videocon, had classified its loans to the company as a non-performing asset (NPA), which in turn was expected to have a negative impact on Videocon’s stock price. Hence, this was considered an UPSI.
During this period, the two promoter entities had pledged their holdings in Videocon and also transferred some shares through off market deals. Dhoot, also an insider, had traded in Videocon shares, either directly or on behalf of the two companies.

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