New Delhi, Apr 26 (PTI) Two individuals on Wednesday settled with capital markets regulator Sebi a case pertaining to alleged insider trading in the shares of Poonawalla Fincorp Ltd, earlier known as Magma Fincorp Ltd.

Surabhi Shah and Saumil Shah paid Rs 1.72 crore and Rs 39 lakh, respectively, towards the settlement fee. Apart from these, the terms of the settlement also included the disgorgement of the already impounded ill-gotten gains of Rs 1.76 crore made by them.

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"In view of the acceptance of the settlement terms and receipt of settlement amounts ... the specified proceedings initiated against the applicants vide show cause notice dated September 15, 2022 are disposed of in terms of ... the Settlement Regulations," Sebi said in its settlement order.

The regulator, in its show cause notice issued, alleged violations of insider trading norms by Shahs.

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The Securities and Exchange Board of India (Sebi), which carried out an investigation in the scrip of Magma for the period January 2021 to February 2021, prima facie found that the applicants were insiders and were aware of the unpublished price sensitive information (UPSI) regarding Poonawalla Group's interest to invest in Magma, and based on the same, the applicants traded in the scrip of Magma and made gains.

Poonawalla Fincorp made a corporate announcement through the stock exchanges on February 10, 2021 regarding the acquisition of controlling stake by Rising Sun Holdings Private Limited, a Poonawalla Group entity, in Magma and the raising of fresh capital of Rs 3,456 crore by Magma through a preferential allotment.

In respect of the corporate announcement, Sebi had received an alert pointing to insider trading by certain entities in the scrip of Magma in February 2021.

After an analysis of the alert, the regulator passed an interim order on September 15, 2021, whereby the applicants were restrained from the securities markets, and their bank accounts were impounded to the extent of alleged illegal gains.

Subsequently, these directions were confirmed through a confirmatory order passed by Sebi in March 2022, subject to certain modifications.

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