Report: Billionaire investor Rakesh Jhunjhunwala accused of insider trading, SEBI investigating

• Jhunjhunwala accused of insider trading in shares of his company Aptech Ltd.
• Jhunjhunwala was questioned for nearly 2 hours in the Sebi office on 24 January.
• The second case of insider trading in 2 years, in 2018, the Geometric Company case was questioned.

MUMBAI: SEBI is investigating allegations of insider trading on billionaire investor Rakesh Jhunjhunwala. The English newspaper Economic Times quoted the sources as giving this report on Tuesday. Accordingly, Jhunjhunwala is accused of insider trading in his company Aptech Limited. Aptech is a company associated with education. Rakesh Jhunjhunwala is its chairman. People associated with the management of a listed company or close to them trade based on information that is not public, then it is considered insider trading. On the basis of such information, it is illegal to earn profits from trading in shares.

Jhunjhunwala’s wife, other family members are also under investigation

According to the report, the Securities and Exchange Board of India (SEBI), which regulates the stock market, is also investigating the role of members of Jhunjhunwala’s family who are shareholders in Aptech. These include wife Rekha, brother Rajesh Kumar and mother-in-law Sushiladevi Gupta. SEBI sent them notice to appear on 24 January. Jhunjhunwala had reached Sebi’s office with his lawyer, where he was questioned for about 2 hours. Jhunjhunwala told the investigating officer that he would keep the same talk on behalf of his family members as well. There are some board members of Aptech also under the scrutiny of SEBI. These include Ramesh Damani and Madhu Jayakumar.

SEBI summoned Jhunjhunwala’s sister Sudha Gupta for questioning on 23 January. Ushama Seth Sule, director of Aptech and sister of Rare Enterprises CEO Utpal Seth, was sent a notice to appear on 28 January. Rare Enterprises is an asset management firm of Jhunjhunwala.

Jhunjhunwala family holds 49% shares of Aptech

Jhunjhunwala is called Warren Buffet of India because of the skill of earning money from investing in shares. He is among the richest private investors in the country. According to Bloomberg estimates Jhunjhunwala holds shares worth Rs 11,140 crore. He first bought shares in Aptech in 2005 at a value of 56 rupees. He and family members now own a 49% stake in Aptech. Jhunjhuwala & Family shares are valued at Rs 690 crore as per the closing price (Rs 173) of Aptech’s shares on BSE on Monday. The management control of Aptech is with Jhunjhunwala.

Jhunjhunwala settled with SEBI in 2018

This is not the first time Jhunjhunwala is being questioned in the Insider Trading case. In 2018, there were also questions and answers on the suspicion of insider trading at the geometric company. Later Jhunjhunwala settled for 2.48 lakh rupees from consent. Consent is the process through which settlement can be made by paying some amount as penalty to SEBI without accepting or denying the charges.

Aptech shares fall 8%

Aptech’s stock plunged 8% on Tuesday due to an investigation report against Jhunjhunwala. The stock slipped to Rs 159.30 on the BSE. However, lower levels led to a recovery of around 2%. The stock had closed at 173.40 on Monday.