New Delhi, Feb 24 (PTI) - Markets regulator Sebi has ordered impounding of alleged illegal gains worth over ₹ 1.02 crore from ADF Foods' promoters Bhavesh Thakkar and Priyanka Thakkar and four others in an insider trading case.

The other four are Pallavi N Mehta, Shefali B Mehta, Navin M Mehta and Abhishek Mehta.

As per Sebi's order, on July 27, 2016, ADF Foods informed the BSE and NSE that the board of directors in its meeting on the same date had approved a buyback of equity shares for an aggregate amount not exceeding ₹ 18 crore.

On May 21, 2016, the discussion of idea to under take buy back or payment of dividend was first tabled at a meeting, Sebi said.

Therefore, Sebi considered the time period from May 21-27 July 2016 as unpublished price sensitive information (UPSI) period when the price sensitive information of buyback remain undisclosed.

Sebi conducted a probe and found that entities had access to UPSI and traded in the scrips of the firm during the May 21-July 27, 2016 (UPSI period).

The regulator further said that it prima facie found that 'insider' Bhavesh Thakkar being promoter and executive director of the firm communicated UPSI to other entities whom Sebi classified them as insiders as they were related to Bhavesh and his promoter wife Priyanka.

Priyanka, being a promoter, was involved in the fund transfer from her husband (Bhavesh Thakkar) to the other four entities and vice-versa for their trades in scrips of the firm during the UPSI period and thus prima facie violated insider trading norms, the regulator said.

Regarding the other four, Sebi noted that Navin Mehta and Abhishek Mehta, being insiders, traded in the shares of ADF Foods through the trading accounts of Pallavi Mehta and Shefali Mehta when the price sensitive information remained undisclosed in violation of insider trading regulations.

Accordingly, Sebi ordered to impound the alleged unlawful gains of ₹ 1,02 crore (alleged gains of 77 lakhs with interest of ₹ 25 lakh) to be paid jointly and severally.

The regulator further added that entities may file their replies to Sebi within 21 days from the date of receipt of this order, if they so desire.

Insider trading breach prompts regulatory impounding of alleged unlawful gains and notice to related parties to reply. Regulatory findings concern alleged misuse of Unpublished Price Sensitive Information during the period between initial discussion and formal approval of a proposed buyback; a promoter executive is said to have communicated UPSI to related persons who traded via fund transfers and third party accounts while the information remained non public, leading the regulator to attribute joint and several responsibility for alleged unlawful gains and to initiate recovery procedures while allowing parties an opportunity to reply.