Capital markets regulator SEBI on Monday levied fines totalling ₹25 lakh on Aadhaar Ventures India Ltd and its directors for violating insider trading rules and listing conditions.

The regulator imposed a fine of ₹10 lakh on Aadhaar Ventures India Ltd (AVIL), its directors — Jils Raichand Madan, Somabhai Sunderbhai Meena and Jyoti Munver (to be paid jointly and severally) for disclosure lapses. It also levied a penalty of ₹5 lakh on AVIL and Meena (to be paid jointly and severally) for flouting insider trading norms.

The order came after SEBI conducted an early investigation for alleged price manipulation in the scrip of AVIL and observed that it had made announcement in August 2014 regarding the acquisition of a company in Africa and further setting up an overseas subsidiary in Singapore, which did not materialise. Thereafter, a separate investigation was conducted by the regulator for the period July to September 2014.

Investigation details

The investigation revealed that AVIL made corporate announcements dated August 1, 2014, and August 14, 2014, with respect to the acquisition of a company in Africa and setting up of an overseas subsidiary in Singapore and thus deemed to be 'price sensitive information'.

However, when BSE sought information from the firm, it did not provide the required information in spite of several reminders sent to the company. As per AVIL's annual reports, the announcements made by the company did not materialise, though it had an impact on the performance of the company and such price-sensitive information is liable to be provided by the firm to the stock exchange on a continuous and immediate basis, SEBI said in the order.

However, the company failed to do so. Therefore, AVIL, Madan, Meena and Munver had failed to disclose the information to the stock exchange, thereby violating disclosure lapses. Also, Munver being the compliance officer of AVIL, failed to ensure that the company had complied with continuous disclosure requirements, thereby violating PIT (Prohibition of Insider Trading) rules.

Norms violated

The regulator also noted that on two different occasions AVIL had violated certain norms of SEBI and thus the default is repetitive in nature. Accordingly, it imposed a fine of ₹5 lakh on AVIL. However, this penalty would be subject to the outcome of SEBI’s appeal pending before the Supreme Court. Section 23E in the Securities Contracts (Regulation) Act pertains to listing conditions.

Meanwhile, in a separate order the regulator slapped a fine of ₹10 lakh on BRH Wealth Kreators Ltd (formerly known as BMA Wealth Creators Limited) for violating regulatory norms. The order came after an examination was initiated by Sebi for possible violations regarding issuance of securities by BRH Wealth Kreators Ltd.