Leaks on WhatsApp: Sebi asks exchanges to check trade data
Stock exchanges would submit their report to Sebi after the investigation, sources said.
Stock exchanges would submit their report to Sebi after the investigation, said a regulatory official familiar with the matter.
Sebi rules mandate dissemination of all financial details of listed companies only through stock exchanges as they are considered price sensitive.
“When the leakage is deliberate and the information is price-sensitive, it may amount to breach of the insider trading norms,” said Sandeep Parekh, founder of Finsec Law Advisors and a former executive director (Legal) with Sebi.
Reuters recently reported that financial results of some of the major Indian companies, including Dr Reddy’s, were circulated in WhatsApp groups of traders just before the companies officially declared the results.
Last week, Sebi chairman Ajay Tyagi had said, “We will certainly investigate the issue. It is a work in progress.”
In 2015, Sebi tightened its insider trading rules. It defined unpublished price-sensitive information as “any information relating to a company or its securities directly or indirectly that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities.”
The regulator’s illustrative list of information which are considered as unpublished price-sensitive information includes financial results, dividends and change in capital structure, among others.
The Reuters report said three days prior to the announcement of Dr. Reddy’s quarterly result, a message circulated on a private WhatsApp group saying the Indian drugmaker would post a loss of more than ?50 crore.
And later on July 27, Dr. Reddy’s reported a loss of ?58 crore and shares of the company went down as much as 4.4%, the report said.
The messages obtained by the news agency were mostly on upcoming quarterly results, including specific metrics such as net profits, revenues and operating margins. They also included upcoming bonus share issues or revenue guidance.
The leakage of information pertained to companies including Cipla, Axis Bank, HDFC Bank, Tata Steel, Wipro, Bajaj Finance, Mahindra Holidays and Resorts, Crompton Greaves Consumer Electricals, Mindtree Ltd, Mastek and India Glycols.