Rakesh Jhunjhunwala summoned by SEBI for insider trading in Aptech; market regulator investigating role of family members too: Report

  • Insider trading refers to the illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information

  • Besides Jhunjhunwala, SEBI is also investigating the role of his family members, including his brother Rajesh Kumar Jhunjhunwala and wife Rekha Jhunjhunwala

  • Jhunjhunwala manages his own equity portfolio as a partner in the asset management firm Rare Enterprises.

Big Bull Rakesh Jhunjhunwala is in the dock for alleged insider trading, according to news reports.

The Securities and Exchange Board of India or SEBI has reportedly initiated a probe against billionaire investor Jhunjhunwala for alleged "insider trading" in shares of Aptech Ltd. The firm is a family-owned education firm in which the ace investor is the chairman.

Insider trading refers to the illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information.

“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, on condition of anonymity.

Besides Jhunjhunwala, SEBI is also investigating the role of his family members, including his brother Rajesh Kumar Jhunjhunwala and wife Rekha Jhunjhunwala, according to a report in Mint.

 Rakesh Jhunjhunwala summoned by SEBI for insider trading in Aptech; market regulator investigating role of family members too: Report

File photo of Rakesh Jhunjhunwala. Reuters

According to Mint, Jhunjhunwala's brother and wife bought 763,057 shares in the IT firm through block deals on September 7, 2016. With 24.224 per cent stake in it, Aptech is the only company in Rakesh Jhunjhunwala's portfolio where he has management control. The stake is valued at around Rs 160 crore.

There has been no official statement from Jhunjhunwala or Aptech yet.

Aptech is the only company in Jhunjhunwala’s portfolio in which he has management control. He currently holds a 24.24 percent stake, valued at about Rs 160 crore, in the company, the Mint report said.

In 2005 Jhunjhunwala picked up a stake in Aptech for the first time — 10 percent at Rs 56 per share. He has gradually increased his holding since then. 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, according to a report in Business Standard.

Described as the investor with a Midas touch, Jhunjhunwala is often referred to as India's Warren Buffett. He manages his own equity portfolio as a partner in the asset management firm Rare Enterprises. His investment portfolio consists of 24 stocks with a total value of around Rs 18,000 crore. His top holdings include Titan, Lupin and Crisil.

According to Bloomberg Billionaire Index, Big Bull’s net worth stood at over $2.5 billion (Rs 17,500 crore) at the end of August 2019.

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Updated Date: Jan 28, 2020 09:48:29 IST