Capital Markets regulator Securities and Exchange Board of India (SEBI) imposed a fine of Rs 3 lakh on Shilpa Shetty, Raj Kundra and Viaan Industries, the company they own, violating its insider trading rules.
The Bollywood actor, her businessman husband and their company delayed a mandatory disclosure to stocks exchanges by more than three years.
In 2015, Viaan Industries had allotted 128,800 shares each to Shetty and Kundra. According to SEBI regulations, the duo had to inform the company within two days the receipt of shares since its value exceeded Rs 10 lakh. Moreover, the company had to inform the same to the stock exchanges. The disclosure finally happened in May 2019.
Replying to SEBI’s show-cause notice, Kundra and Shetty said that “the delay in making the necessary disclosures under the PIT (Prohibition of Insider Trading) Regulations was due to inadvertence and without any malafide intention.”
However, this explanation didn’t wash with SEBI adjudicating officer Suresh B Menon.
His order said: “It is pertinent to mention that the disclosure requirements mandated under the respective regulations serve very important purposes. The stock exchange is informed so that the investing public will come to know of the position enabling them to stick on with or exit from the company. Timely disclosures of the details of the shareholding of the persons acquiring substantial stake is of significant importance.”
On July 19, the Mumbai police had arrested Kundra in connection with an adult film racket.