Home / Markets / Stock Markets /  Sebi slaps fine of 15 lakh on an individual in WhatsApp leak case

New Delhi: Markets regulator Sebi on Monday penalised an individual after finding him guilty of releasing unpublished price sensitive information related to financial results of Asian Paints through WhatsApp messages prior to the official announcement by the company.

The watchdog has imposed a penalty of 15 lakh on Neeraj Kumar Agarwal.

Earlier, Sebi had penalised Shruti Vora, who has been working in the institutional team at Antique Stock Broking Ltd from September 2008, for releasing Unpublished Price Sensitive Information (UPSI) related to financial results of Asian Paints through WhatsApp messages.

Some news reports had referred to the circulation of UPSI in various private WhatsApp groups about certain companies ahead of their official announcements to the respective stock exchanges.

Against this backdrop, Sebi initiated a preliminary examination in the matter during which search and seizure operation against 26 entities of a WhatsApp group were conducted, and about 190 devices and records, among others, were seized.

WhatsApp chats extracted from the seized devices were examined further and it was found that earnings data and other financial information of around 12 companies were leaked through WhatsApp messages.

Asian Paints was among the firms whose quarterly financial results closely matched with the messages that were circulated in WhatsApp chats.

The regulator carried out an investigation in the matter of circulation of UPSI through WhatsApp messages with respect to Asian Paints to ascertain any possible violation of the PIT (Prohibition of Insider Trading) Regulations during March-May 2017 period.

Sebi probe found that Agarwal communicated the UPSI related to total income, EBITDA and profit after tax of Asian Paints for quarter ending March 2017 through WhatsApp messages.

It was observed that the financial figures of Asian Paints circulated through WhatsApp closely matched with those disclosed subsequently by the company to the exchanges.

"The noticee (Agarwal), being an insider, had communicated the UPSI relating to Asian Paints Ltd, to other person through WhatsApp messages, which is in violation of the provisions... of Sebi (PIT) Regulations, 2015, for which the noticee is liable for monetary penalty," Sebi said in its 36-page order.

As per the PIT norms, any person who is in possession of UPSI is regarded as an insider.

Earlier, the regulator had fined persons involved in communicating financial results of Bajaj Auto, Ambuja Cement, Wipro and Mindtree through WhatsApp messages before their official announcements. PTI SP RAM

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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