Sebi fines two Jindal Steel designated persons for trading-window violations

Sebi has imposed a penalty of Rs 1 lakh each on two designated persons of Jindal Steel & Power Ltd for trading in the company’s shares and stock options during the trading-window closure period and for executing trades without pre-clearance.

The order was passed against Ramakant Gupta and Manish Kumar Sowatia in a matter related to trading in the scrip of Jindal Steel & Power. Both were designated persons of the company under its code of conduct framed under insider trading regulations.

The case relates to trades made around Jindal Steel’s June 2023 quarter results. The company disclosed its financial results for the quarter ended June 30, 2023, on August 11, 2023, after market hours. The results showed a 78.87% fall in standalone profit and a 14.98% fall in consolidated profit compared with the year-ago quarter. After the announcement, the stock opened 1.17% lower and later closed 5.15% lower.


Sebi examined trading in the stock during June 1, 2023, to August 31, 2023. The company’s trading window was closed from July 1, 2023, to August 13, 2023, which was 48 hours after the declaration of the quarterly financial results.

Trades during closed window

Sebi found that Gupta and Sowatia traded in the Jindal Steel scrip during the trading-window closure period. The regulator also found that they had executed trades above the company’s threshold without obtaining pre-clearance.

Jindal Steel’s code of conduct required designated persons to take pre-clearance if the number of shares to be traded was 1,000 or more, or if the aggregate market value of the trade was Rs 1 lakh or more. The code also said applications for pre-clearance could be made only when the trading window was open.

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The order said Gupta executed several trades in excess of the threshold in August 2023, including buy and sell trades on August 14, August 16, August 29 and August 30. Sowatia also executed trades above the threshold in June and August 2023. The compliance officer told Sebi that the two had not obtained pre-clearance during the investigation period.

Sebi also recorded that Gupta traded in stock options and equity shares during the closed trading window in July and August 2023. Sowatia traded in equity shares on August 2, August 3, August 4 and August 11, while the window was closed.

Gupta submitted that the trades were inadvertent, unintentional and the result of procedural oversight. He said there was no malice, market manipulation or possession of unpublished price-sensitive information. He also said he was an electrical engineer and worked as Vice President Electrical at Jindal Steel’s Angul plant, with duties limited to technical and operational work.

Sebi rejected the argument that the restrictions applied only to employees directly dealing with price-sensitive information.

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The order said designated persons were expected to exercise utmost care before dealing in company securities, including checking whether the trading window was open and whether pre-clearance was required. It also said violation of trading-window and threshold restrictions under insider trading norms involves strict liability and does not require proof of intention.

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