The Securities and Exchange Board of India (SEBI) has imposed strictures on certain promoters of food processing company ADF Foods in an alleged insider trading case.
ADF Foods, backed by former Fairfax executive Harsha Raghavan-led private equity firm Convergent Finance LLP, said strictures have been imposed on Bhavesh Thakkar, Priyanka Thakkar and four others deemed to be connected persons.
The company has clarified that the above-mentioned persons have no role to play in the day-to-day functioning of the firm.
“Further, Bhavesh Thakkar and Priyanka Thakkar do not hold any shares in the company,” ADF Foods said.
In early 2019, the market regulator ordered impounding of alleged illegal gains worth over Rs 1.02 crore from the six accused in the insider trading case.
On July 27, 2016, ADF Foods informed exchanges that the board had approved a buyback not exceeding Rs 18 crore on the same date.
However, the idea to undertake a buyback or pay dividends was first mooted in a meeting on May 21 the same year.
Therefore, the regulator considered the timeframe from May 21-July 27, 2016 as an unpublished price-sensitive information (UPSI) period.
Prima facie, it found that Bhavesh Thakkar, being promoter and executive director, communicated UPSI to other related entities.
In June 2020, VCCircle reported that Abakkus had bought a minority stake in the food processor for a little more than $1.8 million.
ADF Foods reported consolidated net sales of Rs 272.8 crore and post-tax profits of Rs 42.8 crore for the 2019-20 financial year. It owns brands such as Ashoka, Soul, Truly Indian and Nate’s.