The shares of Lux Industries Ltd. were down by 12% at ₹2,813.70 per equity share against the previous close at ₹3,517.10 per share, in today’s early trade as SEBI bars 14 employees from the company for insider trading.
As per the report given by PTI, Capital markets regulator SEBI on Monday barred 14 entities for indulging in insider trading and ordered impounding ill-gotten gains of Rs 2.94 crore in the matter of Lux Industries Ltd. Those banned by SEBI include Udit Todi, the son of the managing director of Lux, who is currently holding the post of executive director in the company, according to an interim order.
The surveillance alert system of SEBI had detected a suspicious trading pattern in the scrip of Lux around the announcement dated May 25, 2021, regarding the audited financial results for the quarter and fiscal year ended March 31, 2021, wherein substantial increase in profits both on a quarter-on-quarter as well as a year-on-year basis was observed.
Pursuant to the announcement, the scrip of the company registered a price rise of 40.75% on close to close basis within three consecutive trading days.
On an analysis of the alerts on the announcement related to financial results, SEBI found that a group of connected/ related entities were observed to have taken long positions in the scrip. Subsequently, the entities squared off the said long positions, thereby generating substantial profits.
SEBI’s examination, based on blood/family relationships, call data records and social media pointers, among others, revealed that Udit Todi had prima facie passed on the Unpublished Price Sensitive Information (UPSI) to his connected entities, Avani Todi, Sanjeev Bubna and Mohd. Mujtaba Khan.
As per the PTI , SEBI said that “preventive directions are warranted as Udit Todi has now been elevated to the position of executive director of LUX and has access to ongoing UPSIs of the company. Through such acts, the entities have prima facie, violated the provisions of PIT (Prohibition of Insider Trading) rules.”
