Piramal Capital Ex-MD and Associates Settle Insider Trading Charges

Piramal Capital Housing Finance's former MD Khushru Jijina, his wife Benaifer, and Greatdeal Finconsult settled an insider trading case with Sebi by paying Rs 43.55 crore as settlement charges. The case involved alleged violations of insider trading rules by the Jijinas and their associate firm, Greatdeal Finconsult Advisors.

Representative image

Settlement Terms and Disgorgement

The settlement terms included disgorgement of alleged unlawful gains amounting to Rs 24.74 crore, which was to be paid jointly by the parties, including 12 per cent interest per annum. Additionally, Greatdeal Finconsult Advisors LLP proposed to voluntarily abstain from the securities market for six months under revised settlement terms.

Sebi's Chief General Manager Anitha Anoop stated in the order, "...it is hereby ordered that the instant proceedings initiated against the applicants for the aforesaid violations, vide SCN dated May 24, 2023, are disposed." This came after Khushru, Benaifer, and Greatdeal Finconsult proposed to settle the pending proceedings through a settlement order without admitting or denying the findings of fact and conclusions of law.

Investigation Findings

Sebi conducted an investigation into Piramal Enterprises Ltd (PEL) to determine if certain entities traded while having access to unpublished price-sensitive information (UPSI) related to the company's financial results. The investigation period spanned from April 2018 to May 2019.

The probe revealed that Khushru Jijina, as MD of Piramal Capital Housing Finance Ltd (PCHFL), had access to UPSI regarding PEL's financial results for the quarter ending June 2018. Khushru, a designated partner in Greatdeal Finconsult Advisors LLP, availed a loan of Rs 212.51 crore from Piramal Welfare Trust (PWT). This loan was used by Greatdeal to acquire shares of PEL worth Rs 211.23 crore before the publication of UPSI related to PEL's financial performance.

Allegations and Show Cause Notice

Sebi alleged that the applicants possessed UPSI about PEL's financial performance for the quarter ending June 2018. It was further alleged that Greatdeal Finconsult traded in PEL's scrip while in possession of such UPSI, making unlawful gains of Rs 15.32 crore. These activities allegedly violated insider trading norms.

Following the probe, Sebi issued a common Show Cause Notice (SCN) in May 2023 to Khushru and Benaifer Jijina and Greatdeal Finconsult Advisors. Benaifer was managing Greatdeal Finconsult Advisors at that time.

Settlement Process

The applicants filed settlement applications with Sebi under its Settlement Regulations. After receiving these applications, Sebi's High Powered Advisory Committee (HPAC) allowed them to submit revised settlement terms. However, HPAC deferred the matter for reconsideration by Sebi's internal committee.

In a meeting held on March 4, 2024, HPAC considered the revised settlement terms proposed by the applicants. The committee approved these terms subject to a voluntary six-month debarment for both Benaifer Jijina and Khushru Burjor Jijina.

Subsequently, the applicants paid the settlement amount and resolved the matter with Sebi.