Description

SEBI adjudication order against Anil Jain, Kamlesh Jain, and Jain Family Trust for insider trading violations in Refex Industries Limited scrip, involving unlawful gains of Rs. 12.33 Lakh.

Summary

SEBI has issued an adjudication order (Order No. Order/JS/YK/2025-26/31830-31832) against three noticees - Anil Jain (Chairman and Managing Director of Refex Industries Limited), Kamlesh Jain, and Jain Family Trust (through trustee Kamlesh Jain) - for insider trading violations in the scrip of Refex Industries Limited. The investigation covered the period from March 15, 2023 to July 20, 2023, examining trading activities close to the announcement of financial results for the year ended March 31, 2023, which were announced on May 18, 2023. The investigation was initiated based on NSE’s internal alerts on insider trading.

Key Points

  • Anil Jain, CMD of Refex Industries Limited, allegedly communicated Unpublished Price Sensitive Information (UPSI) to Kamlesh Jain
  • Kamlesh Jain and Jain Family Trust allegedly traded in Refex scrip while in possession of UPSI
  • Unlawful gains of Rs. 12.33 Lakh were allegedly made from the trading activities
  • Anil Jain charged with violating Section 12A(e) of SEBI Act read with Regulation 3(1) of PIT Regulations
  • Kamlesh Jain and Jain Family Trust charged with violating Section 12A(d) and (e) of SEBI Act read with Regulation 4(1) of PIT Regulations
  • Investigation period: March 15, 2023 to July 20, 2023
  • NSE triggered the investigation based on internal alerts for trading close to financial results announcement
  • Refex Industries Limited is listed on both BSE and NSE

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action applying existing provisions of:

  • Section 12A(d) and (e) of SEBI Act, 1992
  • Section 15G and 15-I of SEBI Act, 1992
  • SEBI (Prohibition of Insider Trading) Regulations, 2015
  • SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995

Compliance Requirements

  • Insiders must not communicate UPSI to any person who may trade on the basis of such information
  • No person shall trade in securities while in possession of UPSI
  • Entities and individuals must comply with PIT Regulations prohibiting insider trading
  • Trading by connected persons and insiders must adhere to disclosure and compliance requirements under PIT Regulations
  • Market participants should maintain vigilance regarding trading patterns around material announcements

Important Dates

  • March 15, 2023: Start of investigation period
  • March 31, 2023: Financial year end for Refex Industries Limited
  • May 18, 2023: Announcement of financial results at 17:52:34 hours (trigger event for investigation)
  • July 20, 2023: End of investigation period
  • June 11, 2025: Appointment of Adjudicating Officer
  • July 21, 2025: Show Cause Notice issued (Ref. No. SEBI/EAD-2/JS/YK/19428/1-7/2025)
  • December 12, 2025: Order date (as per circular ID)

Impact Assessment

Market Impact: Medium - This enforcement action reinforces SEBI’s strict stance on insider trading violations and sends a deterrent message to market participants. The case involves the Chairman and Managing Director of a listed company, highlighting that no position provides immunity from insider trading regulations.

Legal/Regulatory Impact: High - The order demonstrates active surveillance by stock exchanges (NSE’s internal alerts) and SEBI’s enforcement mechanisms. It establishes precedent for cases involving communication of UPSI by senior management to related parties who subsequently trade on such information.

Operational Impact: Medium - Listed companies and their insiders must ensure robust compliance frameworks to prevent UPSI leakage and unauthorized trading. The case underscores the need for strict adherence to code of conduct for prevention of insider trading and proper implementation of Chinese walls within organizations.

Investor Protection: High - The action protects market integrity by prosecuting unfair trading practices and ensuring level playing field for all investors. The unlawful gains of Rs. 12.33 Lakh, while modest in absolute terms, represent a violation of fundamental market fairness principles.

Impact Justification

High severity enforcement action for insider trading violations with concrete penalties under Section 15G of SEBI Act. Medium impact as it involves specific entities rather than broad regulatory changes.