Sebi dispose of matter against 4 people in alleged WhatsApp leak case

In the high-profile WhatsApp case, Sebi has dismissed

insider trading charges against individuals, who circulated alleged unpublished price-sensitive information about the financial results of certain companies, including TCS and Ultratech Cement.

Those individuals are -- Shailendra Mehta, Aditya Omprakash Gaggar, Shruti Vishal Vora and Neeraj Kumar Agarwal, the Securities and Exchange Board of India (Sebi) said in five separate orders.

The latest orders came after the Securities Appellate Tribunal (SAT) had set aside Sebi's insider trading charges against certain individuals in the WhatsApp leak case in March 2021 and the same was upheld by the Supreme Court on September 26 this year.

 

The case pertains to the circulation of Unpublished Price Sensitive Information (UPSI) in various private WhatsApp groups about five companies -- Tata Consultancy Services (TCS), Ultratech Cement, Bata India, Tata Chemicals and Mindtree -- ahead of their official announcements to the stock exchanges.

It was alleged that Mehta circulated UPSI-related financial earnings of Bata India, Ultratech Cement and Mindtree to others through Whatsapp messages. Also, Gaggar and Agarwal were accused of similar violations in the case of Tata Chemicals and TCS, respectively. In addition, Vora allegedly communicated the financial earnings of TCS and Ultratech Cement to others.

It was alleged that these four persons violated Sebi's regulations that prohibit insider trading activities.

Now, in its orders passed on Thursday, Sebi has disposed of insider trading charges against the four individuals.

Dismissing the charges against these four persons, Sebi said the instant case is a replica of the case that was decided by SAT in March 2021 and upheld by the Supreme Court its order passed on September 26, 2022, with the only difference that the circulation of WhatsApp messages pertain to different scrips.

In its order, SAT had noted the definitions of unpublished price sensitive information and insider information and had said that generally, available information would not be a UPSI. It further, said that the information can be branded as a UPSI only when the person getting the information had knowledge that it was a UPSI.

In 2017, some news reports referred to the circulation of UPSI in various private WhatsApp groups about certain companies ahead of their official announcements to the respective stock exchanges.

Against that backdrop, Sebi had initiated a preliminary examination in the matter during which search and seizure operations against 26 entities of a WhatsApp group were conducted, and about 190 devices and records, among others, were seized.

WhatsApp chats extracted from the seized devices were examined further and it was found that earnings data and other financial information of around 12 companies were leaked through WhatsApp messages.