Sebi finds DSQ guilty of insider trading after 8 years

It took almost eight years for the market regulator to punish a DSQ group company for indulging in insider trading. The Sebi has found DSQ Holdings (DSQH) guilty of insider trading in the shares of DSQ Biotech (DSQB) and debarred it from dealing in the securities market for five years with immediate effect. Both the companies were promoted by Dinesh Dalmia.

DSQH is one of the promoter group companies of DSQB. In his order dated February 27, Sebi chairman G.N. Bajpai said: ‘It has been concluded that shares were purchased by DSQH on the basis of unpublished price-sensitive information of the impending rights issue of DSQB and indulged in insider trading’.

There was a steep jump in the share price of DSQB both in terms of price and volume during the June-December 1994 period. Thereafter, the rights issue opened for subscription and immediately after the closure of the rights issue, the DSQB scrip once again witnessed movement both in terms of both price and volume, which sustained till the first quarter of 1996.

According to the Sebi order, the information which was received or accessed by DSQH regarding the impending rights issue of DSQB was neither available to the other shareholders nor was it made public.