Sebi Orders Attachment of Bank and Demat Accounts for Venugopal Dhoot and Electroparts India Over Insider Trading Dues

The Securities and Exchange Board of India (Sebi) has taken action to recover approximately Rs 68.5 lakh from Venugopal Dhoot and Electroparts India, a promoter entity of Videocon Industries. Sebi has ordered the attachment of their bank accounts, shares, and mutual fund holdings. This move follows a notice issued on September 30, demanding payment within 15 days for insider trading activities related to Videocon Industries shares.

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In September 2021, Sebi imposed a penalty of Rs 25 lakh each on Dhoot and two promoter entities—Electroparts India Pvt Ltd and Videocon Realty and Infrastructures Ltd. The penalty was for insider trading in Videocon Industries' securities. Electroparts India was previously known as Shree Dhoot Trading and Agencies. The insider trading violations occurred in 2017.

Insider Trading Violations

Sebi's investigation revealed that Venugopal Dhoot, along with Electroparts India and Videocon Realty and Infrastructures, engaged in market transactions while possessing Unpublished Price Sensitive Information (UPSI). The investigation into Videocon's scrip took place between April and September 2017. The UPSI period spanned from March 1, 2017, to May 9, 2017.

The UPSI involved information about the classification of Videocon's loan account as a Non-Performing Asset (NPA) by Dena Bank. This information was likely to significantly impact Videocon Industries' share prices. During this period, the two promoter entities either pledged or transferred their shares of Videocon Industries to other entities.

Attachment Orders Issued

On Friday, Sebi issued two attachment orders targeting the bank accounts, demat accounts, and mutual fund folios of Venugopal Dhoot and Electroparts India. The orders aim to recover the outstanding dues. According to the notices, Rs 68.52 lakh remains unpaid by Dhoot and Electroparts India, including interest and recovery costs.

Sebi expressed concerns that the defaulters might dispose of their bank accounts and securities in demat accounts or mutual fund folios. Such actions could delay or obstruct the realisation of the amount due under the certificate. Consequently, Sebi instructed all banks, depositories, and mutual funds to prevent any debits from these accounts.

Venugopal Dhoot acted as an authorised representative for the two promoter companies during the UPSI period. As insiders, they conducted trades on behalf of these companies while possessing sensitive information that had not been made public.

This enforcement action underscores Sebi's commitment to maintaining transparency and fairness in capital markets by holding accountable those involved in insider trading activities.