iconiifl-logo-icon 1
IIFL

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

  • Open Demat with exclusive Advice & Services
  • Get a dedicated Relationship Manager to help you grow your wealth
  • Exclusive advisory on 20+ trading & wealth-based investment options
  • One tap Investments, Automated trading & much more
  • Minimum 1 lakh margin required
sidebar image

PC Jeweller case: SEBI seeks review of the Supreme Court ruling

13 Sept 2022 , 11:50 AM

Last week, the Securities and Exchange Board of India (SEBI) petitioned the Supreme Court to review its April decision in the PC Jewellers insider trading case. The court had overturned the capital markets regulator's ruling that separated family members of a promoter must be regarded as related individuals for purposes of the insider trading laws if they reside at the same address. The promoter family of PC Jewellers is involved in the lawsuit.

According to SEBI and the Securities Appellate Tribunal (SAT), there is a "preponderance of possibility" that parties could share price-sensitive information at the common location. However, a two-judge Supreme Court panel found in April that both the SEBI and the SAT were wrong because they failed to consider family problems.

PC Gupta, Amar Chand Garg, and Balram Garg, who are brothers, are said to have created PC Jeweller (PCJ), according to numerous court filings. The Amar Chand Garg family severed relations with PCJ in 2011 and decreased its holding to 0.7%. Due to a family disagreement, PC Gupta's son Sachin and daughter-in-law Shivani left the company in 2015 and stepped down from their positions at PCJ. They did, however, receive 16 million PCJ shares as payment from the company's founder PC Gupta. All the family members continued to reside on the same property in various structures even after the breakup.

The PCJ board began deliberations on a share buyback from public investors on April 25. On May 10, the board approved the proposal. According to insider trading regulations, the news of the buyback qualified as unpublished price-sensitive information (UPSI) because the proposal was not made public until May 10. The lead banker declined to provide a certificate of no objection on July 7, 2018, which forced PCJ to announce its withdrawal on July 13. Any withdrawal-related tips received between July 7 and July 13 were considered UPSI.

Since the accused in both cases related to the promoter family and lived at the same home, SEBI determined that they likely had access to UPSI regarding the company, and their trading during this time was an attempt to profit from this.

The Supreme Court, in its decision on April 19, rejected this view and criticised the SAT for not undertaking a separate evaluation. The court ruled that SEBI and SAT incorrectly disregarded the family members' claim of estrangement "without acknowledging the facts and supporting documentation that had been put forth. The WTM and SAT should have recognised the necessary information for determining the parties' actual connection."

For feedback and suggestions, write to us at editorial@iifl.com

Related Tags

  • Insider Trading
  • PC Jeweller
  • PC Jewellers
  • SAT
  • SEBI
  • Supreme Court
sidebar mobile

BLOGS AND PERSONAL FINANCE

Images
29 Mar 2024   |   10:14 AM
Images
28 Mar 2024   |   03:36 PM
Images
28 Mar 2024   |   03:01 PM
Images
28 Mar 2024   |   01:21 PM
Read More
Knowledge Centerplus
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Knowledge Centerplus

Follow us on

facebooktwitterrssyoutubeinstagramlinkedin

2024, IIFL Securities Ltd. All Rights Reserved

ATTENTION INVESTORS
  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

RISK DISCLOSURE ON DERIVATIVES
  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

plus
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.