Former JM Financial VP pays 1.24 cr to settle SEBI case

JM Financial Institutional Securities former vice-president Atul Saraogi and Vimala Devi Kalantri has settled with SEBI an alleged insider trading case in the matter of United Spirits Ltd by paying over Rs 1.24 crore towards settlement charges.

Atul Saraogi is son-in-law of Vimala Devi Kalantri, according to Sebi's order.

"Saraogi, an insider, had traded during UPSI (unpublished price-sensitive information) period in the futures and options segment pertaining to the scrip of United Spirits through the account of Kalantri. It is alleged that both jointly and severally made wrongful gains of Rs 30.43 lakh," Sebi said in the order.

The regulator had initiated proceedings and sent notices to Saraogi and Vimala in 2017 wherein it was alleged that both violated PIT (Prohibition of Insider Trading) norms.

"Relay B.V together with Diageo Plc as the Person Acting in Concert made public announcement to acquire upto 3,77,85,214 fully paid up equity shares of USL (United Spirits Ltd)," the order said.

An open offer regarding this was announced on April 15, 2014, by the managers to the offer, JM Financial Institutional Securities Ltd (JMFISL) and HSBC Securities and Capital Markets (India), the regulator said.

"It was observed from the chronology of events that price-sensitive information related to open offer came into existence on March 12, 2014, and the corporate announcement of the open offer was made on April 15, 2014," Sebi said.

Accordingly, the period of UPSI was from March 12 to April 14, 2014, the regulator noted.

During the investigation, it was observed that Atul Saraogi was vice-president of JMFISL, a manager to the open offer.

However, while the adjudicating proceedings were pending, both filed application under settlement mechanism and proposed to pay Rs 75.66 lakh along with disgorgement of Rs 30.43 lakh and interest of Rs 18.11 lakh, totalling Rs 1.24 crore towards settlement amount in April 2019.

The amount was approved by the panel of whole-time members of Sebi, the regulator said.

Subsequently, both remitted the amount and Sebi thereby disposed of the adjudication proceedings initiated against them.