Raj Kundra's company, Viaan Industries, has been slapped with a fine of Rs3 lakh by the Securities and Exchange Board of India (SEBI), the nation's capital markets regulator, for violating insider trading norms.
Kundra, who is currently in judicial custody, was arrested by the Mumbai police's crime branch on 19 July in connection with the alleged creation and promotion of pornography.
SEBI passed the order based on investigations into the trading operations of the company which was listed on the stock exchange between 2013 and 2015. The fine was imposed on both of the firm's promoters — Kundra and his wife, actress Shilpa Shetty — for violating the SEBI (Prohibition of Insider Trading) Regulations, 2015.
The company was being probed over the preferential allotment of shares exceeding Rs10 lakh to the couple, which were not disclosed under Regulation 7(2) of the PIT Regulations within the stipulated time. The company only made the disclosure in 2019, three years after the shares were allotted.
The legal website LiveLaw.in quoted SEBI adjudicating officer Suresh B Menon as saying, "It is on record that the relevant disclosures under the PIT [Prohibition of Insider Trading] regulations were made by the noticees with a delay of more than three years. Therefore, considering these facts and circumstances, I hold that this case deserves an imposition of monetary penalty upon the noticees (sic)."
Kundra and 10 other associates were remanded in judicial custody for 14 days on 27 July by a local court in Mumbai. He has been charged under sections 292 and 293 of the Indian Penal Code, which deal with the sale of obscene material; sections 67 and 67A of the Information Technology Act, which are concerning the transmission of sexually explicit material; and provisions of the Indecent Representation of Women (Prohibition) Act.