Coffee Day Enterprises, Coffee Day Trading Penalised by SEBI for Disclosure Lapses; 4 Employees of Mindtree Also Penalised for Insider Trading
Moneylife Digital Team 29 June 2022
Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs1 lakh each on Coffee Day Enterprises Ltd and Coffee Day Trading Ltd for failing to disclose the pledged and unpledged shares of Mindtree Ltd to the companies and stock exchanges.
Coffee Day Trading (CDTL) is a subsidiary of Coffee Day Enterprises (CDEL). 
In its order, SEBI found that total of 6,81,66,778 shares of Mindtree were pledged and 4,85,09,445 shares were unpledged by CDEL and CDTL during the investigation period — May 2015 to March 2018.
Under the SAST (Substantial Acquisition of Shares and Takeovers) rules, CDEL and CDTL were under an obligation to disclose pledged and unpledged transactions to the company and stock exchanges within two working days of the disposal (pledged) and acquisition (unpledged) of shares exceeding 2% of total shareholding or voting rights in the company.
Both companies were holding more than 5% shares of Mindtree during the investigation period.
“By non-disclosing pledged/unpledged transactions to the company and stock exchanges within two working days of the disposal (pledged) /acquisition (unpledged), noticees have violated the provisions of SEBI’s SAST Regulations,” the regulator said.
In four separate orders, the regulator has levied a fine of Rs1 lakh each on Taneja Vikas, Vishwa SR Kulkarni, Naveen Kumar Kurukuru and Sachin Machhindra Vyavahare for violating insider trading norms in the matter of Mindtree.
The four persons were employees of Mindtree and had transacted in the company’s scrip during January 2019 to March 2019. Further, they had done transactions aggregating a traded value in excess of Rs10 lakh each over a calendar quarter.
They were required to submit disclosures to the company within two trading days of transactions under the PIT (Prohibition of Insider Trading) rules. However, they failed to make the disclosures.
The regulator conducted an investigation after it received a letter from Mindtree in October 2018 informing it regarding instances of violation of the code of conduct framed by the company under the provisions of insider trading rules by some of its employees and action taken by the company pursuant to them.
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