Sebi bans former Diageo official for 7 yrs in insider trading case

Regulator Sebi has barred Nishat Shailesh Gupte, a former official of Diageo Plc, from the capital markets for seven years for indulging in insider trading activity in United Spirits. Besides, Sebi has directed three persons related to Gupte -- Poonam Haresh Jashnani, Haresh Parmanand Jashnani and Varun Haresh Jashnani -- to disgorge unlawful gains totalling over Rs 1 crore made by them, along with interest, in the insider trading case.

Sebi said Gupte, who was the Global Business Development Manager (M&A) of Diageo, was in possession of unpublished price sensitive information (UPSI) relating to the open offer for acquisition of shares of United Spirits Ltd (USL) by Relay BV together with Diageo Plc as the person acting in concert (PAC).

Gupte was part of the core team which represented Diageo/PAC in the transaction to consolidate shareholding of the acquirer in USL and was guiding the team since the beginning of the transaction lifecycle.

Further, the regulator said Poonam, Haresh and Varun also indulged in insider trading activity in USL based on the information passed by Gupte.

Gupte is the son-in-law of Poonam and Haresh, and brother-in-law of Varun.

"Considering the close family relationship amongst Nishat, Haresh, Varun and Poonam, it can reasonably be concluded that it was Nishat who had communicated the UPSI to them," Sebi said in an order dated January 10.

Based on trading while in possession of UPSI, Poonam, Varun and Haresh have made ill-gotten gains, it added.

By indulging in such activities, these persons violated Sebi's PIT (Prohibition of Insider Trading) regulations.

Accordingly, the Securities an Exchange Board of India (Sebi) barred Gupte from the capital markets for a period of seven years. Besides, he has been restrained from associating himself with any listed public company.

Further, Poonam, Haresh and Varun have been asked to disgorge wrongful gains of about Rs 45.44 lakh, Rs 29.24 lakh and Rs 26.18 lakh respectively along with 12 per cent interest per annum. They need to pay the amount within 45 days.

In case they fail to pay the wrongful gains along with interest as directed, Sebi will initiate recovery proceedings.