BCL Industries, MD Pay Rs42.90 Lakh to Settle Non-disclosure, Insider Trading Violation Case

Moneylife Digital Team 07 March 2025

Investor Interest

BCL Industries Ltd and its promoter and managing director (MD), Rajinder Mittal, have agreed to pay Rs42.90 lakh to settle adjudication proceedings initiated by the Securities and Exchange Board of India (SEBI) for alleged violations of various regulations under the SEBI Act, 1992. The settlement amounts were Rs14.30 lakh for BCL Industries and Rs28.60 lakh for Mr Mittal, totalling Rs42.90 lakh.

The proceedings stemmed from allegations of non-compliance with SEBI regulations related to disclosure requirements and insider trading.

Specifically, BCL Industries and Mr Mittal were accused of failing to disclose Manoj Finvest Pvt Ltd (MFPL) as part of the promoter group, violating Regulation 31(4) of the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations 2015, SEBI LODR Regulations 2015 and Regulation 2(1)(pp)(iv)(B) of the SEBI Issue of Capital and Disclosure Requirements Regulations, 2018 (SEBI ICDR Regulations, 2018).

Additionally, Mr Mittal was alleged to have violated Regulation 9(4) of the SEBI Prohibition of Insider Trading Regulations, 2015, by failing to include MFPL under the company's code of conduct, which is intended to regulate and monitor the trading activities of designated persons.

In response to the show cause notice (SCN) issued by SEBI on 4 October 2024, both BCL Industries and Mr Mittal filed settlement applications under the SEBI Settlement Proceedings Regulations, 2018, which allow entities to settle proceedings without admitting or denying the allegations.

These amounts were proposed following an internal review and subsequent recommendations from SEBI internal committee (IC), with the settlement being finalised through a process outlined under the SEBI Settlement Proceedings Regulations, 2018.

A meeting of SEBI IC took place on 19 November 2024, during which the indicative settlement amounts of Rs14.30 lakh for BCL Industries and Rs28.60 lakh for Mr Mittal were communicated. The applicants agreed to the proposed amounts and submitted their revised settlement terms (RST) within the stipulated time.

The matter was then referred to the high-powered advisory committee (HPAC), which met on 24 December 2024. After reviewing the settlement terms and confirming their alignment with SEBI settlement guidelines, the HPAC approved the settlement. The recommendations were subsequently approved by SEBI's whole-time members (WTMs) on 5 February 2025, and the applicants were informed the following day.

On 24 February 2025, BCL Industries and Mr Mittal confirmed the remittance of the settlement amount. As a result, the adjudication proceedings initiated against them were formally disposed of.

"It is important to note that this settlement does not preclude SEBI from taking further action if any discrepancies are found in the disclosure or settlement terms. SEBI also retains the right to take action if it is discovered that the applicants failed to uphold their undertakings or violated the terms of the settlement," the order says.

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