Securities and Exchange Board of India (Sebi) has banned 14 entities for indulging in insider trading and ordered impounding ill-gotten gains of Rs 2.94 crore in the matter of Lux Industries. Those banned by Sebi include Udit Todi, the son of the managing director of Lux, and is currently holding the post of executive director in the company, according to an interim order.
The surveillance alert system of Sebi had detected suspicious trading pattern in the scrip of Lux Industries around the announcement dated May 25, 2021 regarding the audited financial results for the quarter and financial year ended March 31, 2021, wherein substantial increase in profits both on a quarter-on-quarter as well as a year-on-year basis was observed. Pursuant to the announcement, the scrip of the company registered a price rise by 40.75 per cent on close to close basis within three consecutive trading days.
On an analysis of the alerts on the announcement related to financial results, Sebi found that a group of connected/ related entities were observed to have taken long positions in the scrip. Subsequently, the entities squared off the said long positions, thereby generating substantial profits.
Lux Industries is primarily engaged in the manufacturing and sales of knitwears. The company has operations in India and caters to both domestic and international markets.
