Markets regulator Sebi has penalised promoters of Videocon Industries - Venugopal Dhoot and two of his investment companies - with a total Rs 75,00,000 for pledging Videocon shares without proper disclosure to shareholders and also for entering into off market transactions using inside information. The case relates to violations by these entities between April and September 2017. Each of the entities have been fined Rs 25,00,000.
Interestingly, the Sebi order showed that despite sending several notices, Dhoot neither replied to them nor appeared before the regulator’s adjudication officer for the case. Dhoot, the main promoter of the company, was also the chairman & MD. The other two entities named in the order are Videocon Realty & Infra, and Electroparts (India), formerly Shree Dhoot Trading & Agencies.
“Noticees being insiders had executed off-market transactions while in possession of unpublished price sensitive information (UPSI),” Sebi said in the order. During the period of investigation by Sebi, Dena Bank, one of the lenders to Videocon, had classified its loans to the company as a non-performing asset (NPA), which in turn was expected to have a negative impact on Videocon’s stock price. Hence, this was considered an UPSI.
