Jhunjhunwala under Sebi lens for insider trading

Hyderabad: Billionaire investor Rakesh Jhunjhunwala is reportedly under the radar of the Securities and Exchange Board of India (Sebi) in a case of alleged insider trading in shares of the training company Aptech Ltd, according to reports. He is Chairman of the training company.

"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," a person with direct knowledge of the matter told Mint, a business daily.

Insider trading is the practice of trading in shares of a company based on non-public information. Under Sebi's insider trading norms, communication of unpublished price-sensitive information is also considered a violation. On 7 September 2016, shares of Aptech hit their upper circuit level, or the maximum stock price limit in trading on a given day, of 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. These two family members of Rakesh Jhunjhunwala have also received summons from Sebi.

Aptech is the only company in Jhunjhunwala's portfolio in which he has management control. He is a passive shareholder in the other companies. He currently holds a 24.24 per cent stake, valued at about 160 crore, in the company. Jhunjhunwala first picked up a 10 per cent stake in Aptech in 2005 at 56 per share and has gradually raised his holding. He last enhanced his stake in the company by 0.19 per cent in February 2019.

Sebi sent the summons under Section 11 C(5) of the Sebi Act that gives the regulator power to summon individuals and appear before it for any probe.

Rakesh Jhunjunwala manages his own equity portfolio as a partner in asset management firm Rare Enterprises. His investment portfolio consists of 24 stocks. The total value of his portfolio is estimated to be around 18,000 crore. His top holdings include Titan, Lupin and Crisil.

He holds more than 80.46 million shares of Titan. He also owns 7.88 million shares of Lupin worth 645 crore. At the third position by the number of shares held, he owns 4 million shares of Crisil, which are valued at 762 crore. He also owns stocks of companies such as Federal Bank and Edelweiss Financial Services.