Ruchi Soya gets letter from Sebi on norm violation
MUMBAI: Patanjali founder Ramdev’s attempt to get his followers to invest in Ruchi Soya Industries Ltd during a yoga session has landed him in a regulatory soup.
The Securities and Exchange Board of India (Sebi) has asked Ruchi Soya to explain why the yoga guru violated regulatory norms, two people with direct knowledge of the matter said, seeking anonymity.
“The Sebi letter seeking an explanation, sent on September 28, is for alleged violation of insider trading norms, prevention of fraud, unfair trade practices and investment adviser regulations,” one of the two people said.
“A notice was sent to bankers handling Ruchi Soya’s follow-on public offer (FPO) and the compliance team, seeking clarification on the statements by Ramdev. The bankers and the compliance team have duly responded to it,” said the second person.
Email queries sent to Ramdev’s media team and Sebi remained unanswered.
The capital markets regulator sent the letter after a video clip of Ramdev urging thousands of his followers to invest in the Ruchi Soya stock during a yoga session aired on Aastha TV went viral. Patanjali acquired Ruchi Soya in 2019 through the insolvency process.
“Nowadays, there is a lot of buzz on the Ruchi Soya FPO. Now, do you want to become a crorepati? I will give you the mantra to become a crorepati. I have just learnt the mechanisms of investing in the share market. To trade in shares, you require a demat account. So, open a demat account today,” Ramdev is heard saying in the video clip. So far, it appears to be an attempt to educate his followers about investments. But the appeal soon moves into murky territory.
“Get a demat account when I tell you, and buy Ruchi Soya shares. After Ruchi Soya, buy Patanjali (Ayurved) shares,” he added. Though Patanjali is not a listed entity, the company has announced its intention to go public.
“For Patanjali, I will do more. I need to talk in limits. In capital markets, there is a term called market cap. Patanjali’s brand equity, I have to limit my speech here. Ruchi Soya’s FPO is ongoing. You never know someone can get me stuck in legal matters; that’s why I am deliberately saying Patanjali. The world is shrewd. Get Patanjali’s assessment done by any agency, and the market cap will be in thousands of crores. So, anyone who invests in shares of Patanjali and Ruchi Soya cannot be stopped from becoming a crorepati. I am giving you this guarantee in the morning. But don’t buy or sell; that’s a gamble. Buy shares, sit tight and take Samadhi (meditation),” Ramdev said in the video.
While Ramdev does not have any personal holdings in either Ruchi Soya or Patanjali, he is the face of these two fast-moving consumer goods brands.