On Wednesday, Ace investor Rakesh Jhunjhunwala and nine other individuals settled a case related to insider trading in the shares of Aptech Ltd after paying more than ₹37 crore. The amount included settlement charges, disgorgement of ill-gotten gains along with interest charges.
The 9 Other Investors Who Were Charged
According to the orders passed by Sebi, the other nine individuals who settled the case are , Rakesh’s wife Rekha Jhunjhunwala, Rajeshkumar Jhunjhunwala, Shushila Devi Gupta, Sudha Gupta, Ushma Seth Sule, Utpal Sheth, Madhu Vadera Jayakumar, Chugh Yoginder Pal and Ramesh S Damani.
The orders come after the settlement applications by these persons with Sebi proposing to settle, “without admitting or denying the findings of fact and conclusions of law, through a settlement order”. In another settlement orders, Sebi said, “pending enforcement proceedings for the alleged defaults …are settled qua the applicants”.
Alleged Charges on the Investors
It was alleged that Utpal Seth and Rakesh Jhunjhunwala were in possession of the unpublished price sensitive information (UPSI) related to Aptech foraying into preschool segment and communicated the same to other applicants.
The order read that-
“On the basis of the UPSI, Rakesh Jhunjhunwala, Rekha Jhunjhunwala, Rajeshkumar Jhunjhunwala, Shushila Devi Gupta, Sudha Gupta and Ushma Seth Sule are alleged to have traded in the scrip of Aptech during the UPSI period.”
Aptech Released the Statement
Aptech on September 7, 2016 made an announcement on the platform of the stock exchanges about the company’s foray into preschool segment. The information was considered as UPSI and the period of UPSI was March 14, 2016 till September 7, 2016.
Pending adjudication proceedings, these 10 persons approached Sebi to settle the case. Pursuant to the receipt of the applications, the authorized representatives of the applicants had a meeting with the Sebi’s internal committee on December 31, 2020, and deliberated on the terms of settlement.
Sebi’s High Powered Advisory Committee in its meeting held in May, 2021 considered the proposed settlement terms by the applicants and recommended the case for settlement upon payment of settlement charges.
Final Payment and Settlement
Following this, these persons paid over ₹37 crore, which included settlement amount, disgorgement of ill-gotten gains along with interest charges. Individually, Rakesh Jhunjhunwala paid ₹9.5 crore as settlement amount, ₹5.86 crore towards disgorgement of ill-gotten gains along with interest of ₹3.10 crore.
The Jhunjhunwala Family and Their Stakes in the Company
Rekha Jhunjhunwala paid ₹1.57 crore as settlement amount, ₹1.06 crore towards disgorgement of ill-gotten gains and interest of ₹55.18 lakh. Jhunjhunwala and his family own a 49% stake in the education company and it is the only firm in his portfolio over which he exercises management control.