Capital markets regulator Sebi has imposed a fine of Rs 1 lakh on Vijay Anant Dhongde for trading in the shares Mahindra & Mahindra as a designated employee during the restricted periods.
It could not immediately be ascertained however whether Dhongde is still an employee at Mahindra & Mahindra Ltd (MML) as there is no specific mention about his current status in the Sebi order.
The regulator had conducted a probe into the alleged irregularity in trading in MML shares during November-December 31, 2013 for possible violations of the Sebi’s norms after the auto maker itself informed to the markets watchdog about the violations by its employee.
The probe found that Dhongde had traded in the shares of MML when the trading window was closed for declaration of unaudited financial results of the company for the quarter ended on December 31, 2013.
He had traded in the scrip for over Rs 9 lakh and entered into opposite transaction within six months following the prior transaction.
As per Sebi norms, opposite transaction refer to selling or buying any number of shares within 6 months following the prior transaction. Dhongde sold 1,000 shares each on November 20, 2013, November 28, December 9, December 20, and December 30. He took a reverse position on December 31, for 1,000 shares a day after he had sold 1,000 shares i.e. on December 30. 2013. The difference between the selling price on December 30, 2013 and purchase price on December 31, 2013 which can be termed as profit on this transaction is Rs 25,000.
“I find that the noticee being the designated employee of the company had transacted in the shares of MML during the window closure period and also had entered into opposite transaction within six months from the prior transaction which was in complete violation of…the Model Code of Conduct specified in…the PIT (Prohibition of insider trading) Regulations,” Sebi General Manager and Adjudicating Officer D Sura Reddy said in an order passed on October 18. Accordingly, Securities and Exchange Board of India (Sebi) had impose a penalty of Rs 1 lakh on the notice,” said Dhongde.