Varun Beverages Chairman Jaipuria Pays Rs56 lakh To Settle Insider Trading Case with SEBI
Moneylife Digital Team 23 June 2022
Varun Beverages chairman Ravi Kant Jaipuria has settled a case related to alleged violations of insider trading rules after paying nearly Rs56 lakh towards settlement charges to the Securities and Exchange Board of India (SEBI).
Mr Jaipuria had allegedly communicated unpublished price-sensitive information (UPSI) about a strategic partnership between Varun Beverages Ltd (VBL) and PepsiCo for the sale and distribution of Tropicana, to two persons. They traded in the shares of Varun Beverages, PepsiCo India’s bottling partner, based on this information.
Mr Jaipuria approached SEBI to settle the proceedings initiated against him for the alleged violation “without admitting or denying the finding” after a show-cause notice had been served on him on 21 December 2021.
In its order, the market watchdog observed that two entities—Spank Management Services (Spank) and Fenton Investment (Fenton)— traded in the scrip of VBL during using UPSI from 21 December 2017 to 4 January 2018. Both entities are connected to Lemon Tree Hotels Ltd in which Mr Jaipuria was a director.
Spank is connected to Patanjali Govind Keswani, chairman and managing director of Lemon Tree Hotels and Fenton to Arvind Singhania who was an independent director of Lemon Tree Hotels. Thus Mr Jaipuria, Mr Keswani and Mr Singhania were known to each other personally. Mr Jaipuria and Mr Keswani stayed at the same hotel in Bangkok from 27 December 2017 to 2 January 2018, Mr Singhania was at a nearby hotel in the same city during that key period. Jaipuria was then in possession of the UPSI and violated insider trading rules by sharing the information leading to the trades.
It was noted that Fenton (Singhania) and Spank (Keswani) placed an order to buy shares of VBL and sold all the shares immediately after the strategic partnership was made public.
FSEBI recommended that the adjudication proceedings initiated against the applicants may be settled on payment of Rs55.90 lakh towards the settlement amount and the case was settled on Mr Jaipuria remitting the amount to SEBI.
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