SEBI imposes penalty on Divi’s Labs insiders

Our Bureau Chennai | Updated on July 02, 2020

The Securities and Exchange Board of India (SEBI) has imposed a penalty of about ₹96.68 lakh on Divi’s Laboratories’ chief financial officer and seven of his close associates for violation of insider trading norms.

According to SEBI, Divi’s had made an announcement on July 10, 2017, during market hours that USFDA would lift import alert 99-32 on the company’s unit-II at Visakhapatnam, which was a price-sensitive information.

However, SEBI investigation revealed that Kiran Divi (Director of Divi’s) had received the information on the lifting of the import alert on July 7, 2017, through an email from the regulatory counsel. So the unpublished price-sensitive information (UPSI) came into existence on July 7, as per SEBI regulations.

After materiality of the information was discussed in a board meeting (on July 10, 2017), the company disclosed it to the stock exchanges.

SEBI investigation found that L Kishore Babu (CFO), Praveen Lingamneni, Nagesh Lingamaneni, Srilakshmi Lingamaneni, D Srinivasa Rao, Radhika Dronavalli, Gopichand Lingamaneni and Pushpa Latha Devi ― identified as insiders, as they possessed the UPSI ― traded in the scrip between July 10 and 12, 2017, making unlawful gains.

G Mahalingam, whole-time director, SEBI, impounded the alleged unlawful gains of ₹96.68 lakh (gains of ₹74. 08 lakh and interest of ₹22.60 lakh, for the period July 10, 2017, to January 24, 2020) made on them.

Published on July 02, 2020

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