Sebi orders to disgorge Rs 2.3 cr in insider trading case

Markets regulator Sebi on Monday asked Fourth Dimension Solutions Managing Director Amalendu Mukherjee to disgorge an amount worth over Rs 2.3 crore for insider trading in the scrip of Ricoh India Ltd.

The amount has to be paid along with 12 per cent interest within 45 days, the regulator said in its final order.

In addition, Mukherjee has been restrained from accessing securities markets for a period of seven years, Sebi said in its order.

The Securities and Exchange Board of India (Sebi) had conducted an investigation between August 2014 and November 2015 in the scrip of Ricoh India.

During the probe, it was found that Mukherjee, while in possession of UPSI (unpublished price-sensitive information) was involved in manipulating the buy and sale orders in the shares of Ricoh as the authorised person on behalf of Fourth Dimension Solutions Ltd (FDSL) and made ill-gotten gains out of it.

The UPSI was pertaining to mis-stating financial statements of Ricoh from the financial year 2012-13 onwards.

Sebi noted that FDSL and Mukherjee were in a long business relationship with Ricoh. Also, he had a personal relationship with the senior management of Ricoh.

It was further revealed that he offloaded the entire shareholding of Ricoh held by FDSL in November, 2015, when statutory auditor raised suspicions regarding certain transactions between Ricoh and its customers.

The share price of Ricoh has fallen drastically from a high of around Rs 1,000 in August 2015 to below Rs 200 in December 2016 and by virtue of his offloading during November 17, 2015, Mukherjee on behalf of FDSL had avoided a notional loss of over Rs 1.16 crore.

Sebi noted that by virtue of the trading while in possession of UPSI, Mukherjee in the account of FDSL not only made wrongful gains but also avoided loss. The total of unlawful gains and losses avoided by FDSL, while in possession of UPSI, was Rs 2.30 crore.

Mukherjee, who is the managing director and having around 73 per cent promoter holding in FDSL, is the ultimate and indirect beneficiary of the insider trading and the fraud of manipulation of accounts of Ricoh by FDSL with the involvement of its managing director has violated the Prohibition of Insider Trading Regulations, the regulator said.

In March, the regulator had passed an interim order against FDSL and Mukherjee impounding an amount of over Rs 2.30 crore from them jointly and severally.