Rakesh Jhunjhunwala Comes Under SEBI Lens For 'Insider Trading'
Billionaire investor, Rakesh Jhunjhunwala, is reportedly under the radar of the Securities and Exchange Board of India (SEBI) in a case of alleged insider trading in shares of the training company Aptech Ltd. Jhunjhunwala is the Chairman of the training company.
A Live Mint report mentioned that SEBI is scrutinising a time frame from February 2016 to September 2016 for irregular trades, as the regulator suspects the trades were done on the basis of insider information.
Insider trading is the practice of trading in shares of a company based on non-public information. Under SEBI's insider trading norms, communication of unpublished price-sensitive information is also considered a violation.
Shares of Aptech hit reached the maximum stock price limit for a day on September 7, 2016, after his brother Rajesh Kumar Jhunjhunwala and wife Rekha Jhunjhunwala bought 763,057 shares in the IT firm through block deals. His brother and wife are also summoned for the interrogation.
Jhunjhunwala only holds the management control in Aptech as he is a passive shareholder in other companies.
Currently, the Jhunjhunwala family hold around 45 per cent stake in Aptech. He first bought the stake at Aptech in 2005 at ₹56 per share and has gradually raised his holding.
Soon after the news of his summon broke, Aptech shares plunged 6.66 per cent to ₹161.85 on the BSE.
Jhunjhunwala is known as "India's Warren Buffet" for his ace stock pricing skills. He is one of the country's richest individual investors. According to Bloomberg, he alone holds shares worth ₹11,140 crores.