Six years after unsubstantiated allegations were levelled against Treehouse Education and Accessories, the Securities and Exchange Board of India (SEBI) has given a clean chit to the company and its promoters Rajesh Bhatia, Geeta Bhatia, Giridharilal S Bhatia and other two company officials.
In a letter to the promoters of Treehouse Education & Accessories, SEBI’s Corporate Finance Investigation Department said no action would be taken against the company after the forensic audit initiated by SEBI showed no instances of any financial misgivings and that the investigations were now completed and closed.
The reprieve for the company comes after a six-year long audit by SEBI following unsubstantiated allegations.
SEBI had banned Rajesh Bhatia and his wife Geeta Bhatia, promoters of Treehouse Education and Accessories, from accessing the stock market for one year, and levied a fine of ₹28 lakh for indulging in insider trading during the company’s merger with Zee Learn in 2015.
An order passed by SK Mohanty, Whole-time Member, SEBI, said the noticees (Bhatias) were found to have traded and executed the sale of 40 lakh shares of the company on December 3, 2015, just a day prior to the public announcement of the proposed merger of Zee Learn with the company.
The information pertaining to the proposed merger was price-sensitive information possessed by certain people connected with the company. Rajesh Bhatia passed on the information to his wife who, being a Director and connected person, was an insider of the company.
The fact that the Bhatias were not able to justify their indulgence in the selling of shares of the company further leads to an irresistible conclusion that the same was done under the influence of unpublished price-sensitive information, it said.
Hence, the Bhatias were restrained from accessing the securities market and further prohibited from dealing in securities in any manner for one year, said the order.