SEBI Fines Two Jindal Steel Designated Persons ₹1 Lakh Each for Trading-Window and Pre-Clearance Breaches
The Securities and Exchange Board of India (SEBI) has imposed penalties of ₹1 lakh each on two designated persons of Jindal Steel & Power Ltd (JSPL) after finding breaches of the company’s trading-window and pre-clearance controls under the insider-trading framework. The adjudication order, published on September 9, 2026, concerns Ramakant Gupta and Manish Kumar Sowatia and is a useful compliance reminder for listed companies, compliance officers and employees classified as designated persons.
What SEBI found
SEBI examined trading in the JSPL scrip during the period from June 1 to August 31, 2023. The company’s trading window was closed from July 1 to August 13, 2023 in connection with its financial results for the quarter ended June 30, 2023. The results were disclosed after market hours on August 11, 2023, and the window remained closed for the prescribed period after the results became generally available.
According to the order as reported from the official proceedings, both individuals traded during the closed-window period. SEBI also found transactions above the threshold prescribed in JSPL’s code without obtaining the required pre-clearance. The company’s code required pre-clearance where the proposed transaction involved 1,000 shares or an aggregate market value of ₹1 lakh or more.
Designated-person status carried its own compliance burden
A central issue in the proceeding was whether an employee’s functional role, lack of access to financial-result preparation or absence of an intention to misuse unpublished price-sensitive information could excuse the procedural breaches. Gupta said the trades were inadvertent and that his work was technical and operational in nature. Sowatia also relied on his plant-operations role and said he was unaware of his classification as a designated person.
SEBI did not accept those arguments as a defence to the compliance failures. The regulator’s approach was that a person who is classified as a designated person must exercise due care before dealing in the company’s securities. That includes checking whether the trading window is open and whether pre-clearance is required for the proposed trade. The order therefore has significance beyond the two individuals involved: it reinforces that trading-window and pre-clearance controls are not merely advisory controls tied only to proven possession of unpublished price-sensitive information.
Penalty and legal basis
The adjudication resulted in a penalty of ₹1 lakh on each individual. Supporting reports of the SEBI order state that the violations were found under clauses 4 and 6 of Schedule B read with Regulation 9(1) of the SEBI (Prohibition of Insider Trading) Regulations, 2015, with monetary penalty imposed under Section 15HB of the SEBI Act, 1992.
SEBI also considered the circumstances relevant to penalty. The available record did not establish disproportionate gain or quantifiable investor loss arising from the violations, and no previous SEBI penalty against the two individuals was noted in the reports of the order. Their cooperation and personal circumstances were also considered. Those factors affected the quantum of penalty, but they did not erase the underlying compliance breaches.
What listed companies and compliance teams should review
The order is particularly relevant to company secretarial, legal, finance and compliance teams that administer codes under the insider-trading regulations. A sound control environment should not depend only on employees remembering policy language. Companies should be able to demonstrate that designated-person lists are current, trading-window closure messages reach the intended recipients, pre-clearance thresholds are unambiguous and records of approvals or rejections are retained.
- Designated-person mapping: Periodically reconcile HR, functional and insider-trading records so employees know when they are covered.
- Window controls: Communicate closure and reopening dates clearly and maintain evidence of those communications.
- Pre-clearance: Make thresholds and approval workflows easy to verify before an order is placed.
- Derivative transactions: Controls should cover the instruments addressed by the company code, not only cash-market share purchases.
- Exception review: Any breach should be investigated promptly, documented and escalated under the company’s code and applicable regulations.
For designated persons, the safest operating rule is to verify both the trading-window status and the pre-clearance requirement before executing a transaction. For listed companies, the order is a reminder that insider-trading compliance must work as an operational control system, not only as a policy document. The absence of proven misuse of UPSI does not by itself neutralise a separate breach of trading-window or pre-clearance requirements.
Official source: View the official source document
Key takeaway
SEBI has penalised two Jindal Steel & Power designated persons ₹1 lakh each over closed-window trades and failures to obtain pre-clearance, reinforcing strict compliance expectations under insider-trading controls.
