Markets regulator Securities and Exchanges Board of India has summoned billionaire investor and Aptech Ltd chairman Rakesh Jhunjhunwala as part of an investigation into alleged insider trading in the shares of Aptech, an education firm owned by him and family.
According to various media reports, Sebi is also investigating the role of other family members who are shareholders, as well as some board members, including investor Ramesh S. Damani and director Madhu Jayakumar. “The regulator is examining a time frame of February 2016 to September 2016 for irregular trades, which it suspects were done on the basis of insider information," LiveMint reported citing a person with direct knowledge of the matter.
Reportedly, on 7 September 2016, shares of Aptech were locked in their upper circuit level, or the maximum stock price limit in trading on a given day, of Rs 175.05 after the investor’s brother and wife—Rajeshkumar Jhunjhunwala and Rekha Jhunjhunwala— bought 763,057 shares in the IT firm through block deals. Rajeshkumar, Rekha and her mother Sushiladevi Gupta were also called for questioning by Sebi on January 24. According to a report by The Economic Times, Rakesh Jhunjhunwala was questioned for at least a couple of hours at the regulator’s headquarters in Mumbai’s Bandra-Kurla Complex.
Aptech is the only company in Jhunjhunwala’s portfolio in which he has management control. He is a passive shareholder in the other companies. Jhunjhunwala currently holds a 24.24 per cent stake, valued at about ₹160 crore, in the company.
Often dubbed as India’s Warren Buffett, Jhunjhunwala is one of the country’s richest individual investors, holding shares worth almost Rs 11,140 crore, according to Bloomberg estimates.