SEBI imposes ₹3 Lakh fine on Shilpa Shetty, Raj Kundra for violating insider trading rules

Amid the ongoing investigation into the porn films racket case, the Securities and Exchange Board of India (SEBI) on Wednesday imposed a penalty of Rs 3 lakh on Bollywood actor Shilpa Shetty, her husband and businessman Raj Kundra, and his company Viaan Industries for violating Insider Trading rules. 

Kundra, Shetty and Viaan Industries have been fined for a three-year delay in disclosing an allotment of preferential shares. In 2015, Viaan Industries had made a preferential allocation of 5,00,000 equity shares, of which,1,28,800 were allocated to its promoters - Kundra and Shetty. 

As per SEBI’s Prohibition of Insider Trading Rules, 2015, the couple was supposed to reveal this transaction to the company within two days if it surpassed the Rs 10 lakh value. However, the transaction was disclosed only three years later in 2019, despite the value exceeding Rs 2.5 crore each. 

In response to a notice from the regulator, Shetty and Kundra acknowledged the mistake and said it was not done with malafide intent. However, the SEBI adjudicating officer Suresh B Menon did not entertain the excuse and imposed a fine of Rs 3 lakhs, in an order dated Wednesday.

Raj Kundra arrested in porn films case

The SEBI fine adds to the troubles of Raj Kundra, who is currently in police custody for allegedly running a porn racket that spans across various cities in India. In yet another major setback, the Mumbai Esplanade court refused to grant him bail. Kundra was apprehended on July 19 along with 10 others on charges related to the alleged creation of pornographic films that is being probed by the Mumbai Police Crime Branch.

The 45-year-old businessman has been charged with cheating for obscene advertisements and robbery in the FIR lodged against him. In their remand application, Mumbai Police has claimed that Kundra earned nearly ₹1.17 crore from subscribers of his HotShots app from August to December last year. While the app has been taken down by both Apple and Google Play Store, police are yet to procure details determining Kundra’s earnings from HotShot’s subscribers on Play Store.