Sebi penalises individual for flouting insider trading rules in Manappuram Finance case

Markets regulator Sebi has penalised an individual for procuring unpublished price-sensitive information related to financial results of Manappuram Finance Ltd (MFL) and communicating the same through a research report. The regulator levied a fine of Rs 15 lakh on Pankaj Agarwal, who was part of the research department of Ambit Capital Private Limited, according to a Sebi order.

Pankaj Agarwal had a meeting in March 2013 with I Unnikrishnan and Sachin Agrawal of MFL, wherein Pankaj Agarwal allegedly procured the unpublished price-sensitive information (UPSI) related to the company's quarterly results and communicated the same through a research report in violation of insider trading rules.

Sebi noted that Pankaj Agarwal did not maintain the confidentiality of the price-sensitive information and has thereby violated insider trading norms.


MFL, in its minutes of the board meeting held in March 2013, recorded that "...there was a probability that the company may have to report negative profit for the quarter ended March 31, 2013 contrary to the expectations of stakeholders".

The purpose of the meeting between MFL representatives and analysts of Ambit, including Pankaj Agarwal, was to seek professional advice, which is in all probabilities on guiding the market about the quarterly results, the regulator noted in an order passed on Monday.

In two separate orders, the Securities and Exchange Board of India (Sebi) on Wednesday slapped a fine of Rs 1 lakh each on Bankri Rudraswamy Prasanna Kumar and Shashwat Kumar Gupta for flouting insider rules in the matter of Mindtree.

Kumar and Gupta were employees of Mindtree and had executed transactions aggregating to a traded value in excess of Rs 10 lakh each during the calendar quarter from January 2019 to March 2019.

They were required to make the disclosure to the company within two trading days of such transactions. However, they failed to make the requisite disclosures within the stipulated time. By doing so, they violated the PIT (Prohibition of Insider Trading) norms, Sebi said.