InvestorQ : What is the reason SEBI has imposed such a big fine on PC Jewellers and how it will impact the stock price?
Anjana Aiyar made post

What is the reason SEBI has imposed such a big fine on PC Jewellers and how it will impact the stock price?

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Arya Nanda answered.
2 years ago
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SEBI has already issued show cause notice to PC Jewellers over the insider trading case. SEBI has alleged that the members of the promoter group of PC Jewellers had made profits to the tune of Rs.8 crore by trading on classified information about the company that had not yet been made public. While SEBI has already served a penalty of Rs.8 crore on PC Jewellers for insider trading, it has also served a show cause notice as to why the assets of the company and its directors should not be impounded to recover this loss caused to the public by insider trading.

The case dates back to May 2018 when the stock of PC Jewellers had been locked in the upper circuit of 10% after it announced a buyback offer to shareholders. Subsequently, the buyback was withdrawn and this led to the stock falling by 20% on that day. According to SEBI investigations, the directors of the company had used the (futures and options) route to profit from this unpublished price sensitive information (UPSI). The show cause notice served to the MD also asks why they should not be barred from the capital markets.

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