SEBI sends Rakesh Jhunjhunwala, family notices in Aptech insider trading case: Report

Rakesh Jhunjhunwala Securities and Exchange Board of India (SEBI) is investigating billionaire Rakesh Jhunjhunwala's alleged insider trading in shares of information technology company Aptech – the only firm in his portfolio in which he has management control. The market regulator has issued a show-cause notice to Jhunjhunwala and his family (who jointly own Aptech), and other board members for trading company’s shares in May-October 2016, as per a Times Now report. Moneycontrol could not independently verify the report. According to the report, SEBI plans to order a freeze on Jhunjhunwala’s bank accounts to the “extent of alleged profits made." SEBI has also “sought to know from Aptech why it gave preclearance to directors to trade in shares,” the report quoted a source as saying. “Whenever there is an insider trading case of clear-cut gains made or losses avoided, coming on record, SEBI has been passing an impounding order against the person.” The notice comes after SEBI in January this year questioned Jhunjhunwala, and board members Ramesh Damani and Madhu Jayakumar for the same case. Jhunjhunwala currently holds 24.24% stake in Aptech, which is valued around Rs 1600000000. He and his wife Rekha, brother Rajeshkumar and mother-in-law Sushiladevi Gupta were called in for questioning on January 24, the report said. Jhunjhunwala's sister, Sudha Gupta was questioned by the market regulator on January 23, the report added. This is not the first time the IT Company has been under the scanner. SEBI and the Enforcement Directorate are investigating Aptech for money laundering through GDR route. SEBI is investigating from February 2016 to September 2016 period at the same time Rakesh Jhunjhunwala wife and his brother increased their stakes in Aptech via block deal and locked in an upper circuit. Insider trading usually involves trading in shares of a company based on non-public information. But non-publishing of price-sensitive information is also considered by SEBI as insider trading. Jhunjhunwala first purchased a 10% stake in Aptech in 2005, at Rs 56 per share. He usually invests in equity through his company Rare Enterprises.