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The Print
7 days ago
- Business
- The Print
Sebi bans IndusInd Bank's former CEO Sumant Kathpalia, 4 others fromsecurities mkt
The other officials restrained by Sebi are Arun Khurana, Executive Director and Deputy CEO of the bank at the time of the alleged violation; Sushant Sourav, Head- Treasury Operations; Rohan Jathanna, Head- GMG Operations and Anil Marco Rao, Chief Administrative Officer (CAO)- Consumer Banking Operations. Also, the regulator has impounded Rs 19.78 crore collectively from the five individuals, according to an interim order passed by Sebi. New Delhi, May 28 (PTI) Markets regulator Sebi on Wednesday barred former Chief Executive Officer of IndusInd Bank, Sumant Kathpalia, and four others from accessing the securities markets, in connection with an alleged case of insider trading in the bank's shares. These senior executives are accused of trading in IndusInd Bank shares while in possession of unpublished price-sensitive information (UPSI), a breach of insider trading regulations. The case stems from a Master Direction issued by the Reserve Bank of India (RBI), which had a significant impact on IndusInd Bank's operations. The bank's internal team had evaluated the financial implications of the directive and possessed non-public information at the time. Sebi's investigation found that the five individuals executed trades before this sensitive information was made public, using their access to confidential insights for potential personal gain. Accordingly, SEBI said: 'All the Noticees, viz. Noticee Nos. 1 to 5, are hereby restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever, until further orders.' PTI SP ANU ANU This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
The Print
7 days ago
- Business
- The Print
Sebi bans IndusInd Bank former CEO, 4 others from securities mkt for insider trading
The other officials of IndusInd Bank Ltd (IBL) restrained by Sebi are Arun Khurana, who was Executive Director and Deputy CEO at the time of the alleged violation; Sushant Sourav, Head, Treasury Operations; Rohan Jathanna, Head, GMG Operations; and Anil Marco Rao, Chief Administrative Officer (CAO), Consumer Banking Operations. In addition to the market ban, Sebi has impounded Rs 19.78 crore collectively from the five individuals, according to an interim order passed by the regulator. New Delhi, May 28 (PTI) Markets regulator Sebi on Wednesday barred former CEO of IndusInd Bank, Sumant Kathpalia, and four other senior officials from accessing the securities markets in connection with an alleged insider trading in the bank's shares. These senior executives allegedly traded in IndusInd Bank shares while in possession of unpublished price-sensitive information (UPSI) related to discrepancies in account balances of the bank's derivative portfolio. By doing so, they violated insider trading regulations. 'During the preliminary examination conducted by Sebi, on the basis of the evidence collected so far, it is prima facie seen that all noticees traded in the scrip being aware of the UPSI related to the discrepancies and averted/avoided huge losses,' the regulator said in its 32-page order. The case originated from a Master Direction issued by the Reserve Bank of India (RBI), which had a significant operational and financial impact on IndusInd Bank. Sebi noted that the internal team of the bank was aware of the financial implications due to discrepancies in the derivative portfolio and had already begun calculating the impact internally. A preliminary examination revealed that an email dated November 30, 2023, was sent by the Head, Accounts, of the bank to certain employees. This communication cited a figure of Rs 1,749.98 crore as the estimated impact of discrepancies in the derivative portfolio. Further, during the preliminary examination, it is prima facie seen that members of the senior management of IBL including noticees (five officials) were aware of the UPSI related to discrepancies and they had kept constant supervision upon the same. The evidence analysed during the preliminary examination revealed that Noticees traded in the scrip of IBL while being insider, Sebi said. Sebi noted that emails dated December 6, 7, and 8, 2023, referenced a discrepancy of around Rs 1,362 crore, with the final figure of Rs 1,572 crore communicated to certain employees on December 11, 2023. The examination also revealed that figures regarding the discrepancies were not only being tracked internally but were also being prepared for submission to the RBI. Emails circulated on December 16, 2023, March 6, 2024, and May 5, 2024, indicated discrepancy figures of Rs 1,572 crore, Rs 1,776.49 crore, and Rs 2,361.69 crore for the quarters ended September 2023, December 2023, and March 2024, respectively. However, this information was only disclosed to the public via stock exchange filings on March 10, 2025, Sebi noted. It was also noted that senior management insisted on getting these figures validated externally. Accordingly, KPMG was appointed in January 2024, to review the discrepancies identified by the internal team. The preliminary examination revealed that KPMG submitted a figure of Rs 2,093 crore as the negative impact from the discrepancies, covering data till December 31, 2023. In its order, Sebi noted that noticee nos. 1 to 5 (five officials) traded in the scrip of IBL while being insider and accordingly barred them 'from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever, until further orders.' On April 29, CEO Kathpalia and Deputy CEO Khurana resigned from the bank. Following their exit, the IndusInd Bank Board appointed a Committee of Executives to oversee daily operations until a new MD & CEO takes charge or for a period of three months, whichever is earlier. The fraud-hit private sector lender earlier this month reported a Rs 2,329 crore loss for the March quarter, its worst performance ever, as the interim management opted to go for a deep-clean exercise beyond recognising the impact of wrong accounting practices. In the March quarter, the bank took impact of all the irregularities brought to the notice, including a Rs 1,960 crore hit from incorrect recognition of derivative trades, cumulative interest income reversal of Rs 674 crore due to incorrect accounting, disclosed a Rs 172 crore fraud where employees had led it to incorrectly classify the amount as fee income under the microfinance business, set off Rs 595 crore of incorrect manual entries posted as 'Other Assets' and 'Other Liabilities' in the past, and also recognized the higher slippages. The internal audit report of the bank revealed 'involvement of senior Bank officials, including former Key Management Personnel (KMP), in overriding key internal controls'. The bank reported the likely involvement of senior management in the accounting fraud to the Central Government. PTI SP DP MR MR This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
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Business Standard
7 days ago
- Business
- Business Standard
IndusInd Bank shares rise after Sebi bans ex-CEO, 4 others from markets
Shares of crisis-hit IndusInd Bank traded higher after a volatile opening, following the market regulator barring its former chief executive officer (CEO), Sumant Kathpalia and four other senior officials from trading in the securities market. IndusInd Bank's stock rose as much as 0.7 per cent during the day to ₹810 per share, after falling by 0.3 per cent during open. The stock trimmed some gains to trade 0.6 per cent higher, compared to a 0.15 per cent advance in Nifty50 as of 9:48 AM. Shares of the company have fallen over 6 per cent from their recent peak of ₹863, which it hit earlier this month. In March, the stock plunged over 30 per cent after noting the discrepancies in its derivatives portfolio. The stock has fallen 15.4 per cent this year, compared to a 4.8 per cent advance in the benchmark Nifty50. Sebi bans IndusInd ex-CEO, 4 others from markets In an interim order issued on May 28, Securities and Exchange Board of India (Sebi) said that these individuals had traded in IndusInd Bank shares while being in possession of unpublished price-sensitive information (UPSI), violating insider trading rules. The other executives named in the order are Arun Khurana (former executive director and deputy CEO), Sushant Sourav (head of Treasury operations), Rohan Jathanna (head of GMG operations), and Anil Marco Rao (chief administrative officer for consumer banking operations). Sebi conducted a suo-motu preliminary examination after Chairman Tuhin Kanta Pandey said the market regulator is looking into any "egregious violations" by senior management of the lender. IndusInd Bank Q4 results IndusInd Bank posted a net loss of ₹2,329 crore, a first in 19 years, for the quarter ended March 31, 2025. The lender's losses came as it substantially ramped up provisions and reversed incorrectly booked revenue and income entries worth over ₹2,500 crore linked to accounting discrepancies in the derivatives and microfinance segments discovered during the quarter. Despite the sharp Q4 loss, the bank reported a net profit of ₹2,575 crore for FY25, down 71 per cent year-on-year (YoY). The lender's net interest income (NII) was down 43 per cent YoY in Q4FY25 at ₹3,048 crore, while other income was down 72 per cent YoY at ₹709 crore. IndusInd Bank analyst ratings Twenty of the 37 analysts tracking IndusInd Bank have a 'buy' rating on the stock, 15 have a 'hold' call, while 22 suggest a 'sell' on the stock, according to Bloomberg data.
Mint
7 days ago
- Business
- Mint
IndusInd Bank share price trades flat after Sebi bars former CEO, four others from securities market for insider trading
IndusInd Bank share price traded flat on Thursday after capital markets regulator Sebi barred the company's former CEO Sumant Kathpalia, and four other senior officials from accessing the securities markets in connection with an alleged insider trading in the bank's shares. IndusInd Bank shares opened marginally lower at ₹ 803.05 apiece as against its previous close of ₹ 804.75 per share on the BSE. IndusInd Bank share price gained as much as 0.73% to ₹ 810.60 apiece. The Securities & Exchange Board of India (SEBI) has also impounded ₹ 19.78 crore collectively from the five individuals. The other officials of IndusInd Bank restrained by the regulator for alleged insider trading are former executive director and deputy CEO Arun Khurana, treasury operations head Sushant Sourav, global markets group (GMG) operations head Rohan Jathanna, and Anil Marco Rao, chief administrative officer of consumer banking operations. 'There is no impact on the financial, operation or other activities of IndusInd Bank arising out of the Interim Order,' IndusInd Bank said in a regulatory filing on Wednesday. According to the interim order passed by Sebi, it was found that these senior executives allegedly traded in IndusInd Bank shares while in possession of unpublished price-sensitive information (UPSI) related to discrepancies in account balances of the bank's derivative portfolio. By doing so, they violated insider trading regulations. The case originated from a Master Direction issued by the Reserve Bank of India (RBI), which had a significant operational and financial impact on IndusInd Bank. Sebi noted that the internal team of the bank was aware of the financial implications due to discrepancies in the derivative portfolio and had already begun calculating the impact internally. The bank informed its executives that the estimated financial impact stood at ₹ 1,749.98 crore. In an email dated 4 December 2023, Kathpalia acknowledged the seriousness of the matter — an event the Sebi identified as the point of origin for the unpublished price sensitive information (UPSI). Despite this, IndusInd formally classified the information as UPSI only on 4 March 2025 and disclosed it publicly on 10 March 2025 via a stock exchange filing — over 15 months after the information first emerged. As of December 2024, IndusInd's net worth stood at ₹ 65,101.65 crore. The eventual disclosure led to a material impact of approximately ₹ 1,529.88 crore. Sebi's investigation further revealed that five senior executives collectively sold 479,000 IndusInd Bank shares between December 2023 and March 2025. Importantly, no purchases were made by these individuals during this period, which Sebi interpreted as indicative of deliberate and strategic offloading. IndusInd Bank's average share price in December 2023 stood at ₹ 1,541.75, with the stock reaching a high of ₹ 1,618.90 on 28 December 2023. Following the disclosure, IndusInd Bank share price plummeted to a 52-week low of ₹ 605.40 on 12 March 2025. This marked a decline of more than 60% from the period during which the executives offloaded the shares to the point of public disclosure. In its order, Sebi noted that noticee nos. 1 to 5 (five officials) traded in the scrip of IBL while being insider and accordingly barred them 'from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever, until further orders.' On April 29, CEO Kathpalia and Deputy CEO Khurana resigned from the bank. Following their exit, the IndusInd Bank Board appointed a Committee of Executives to oversee daily operations until a new MD & CEO takes charge or for a period of three months, whichever is earlier. The fraud-hit private sector lender reported a loss of ₹ 2,329 crore for the quarter ended March 2025, its worst performance ever, as the interim management opted to go for a deep-clean exercise beyond recognising the impact of wrong accounting practices. In the March quarter, the bank took impact of all the irregularities brought to the notice, including a ₹ 1,960 crore hit from incorrect recognition of derivative trades, cumulative interest income reversal of ₹ 674 crore due to incorrect accounting, disclosed a ₹ 172 crore fraud where employees had led it to incorrectly classify the amount as fee income under the microfinance business, set off ₹ 595 crore of incorrect manual entries posted as "Other Assets" and "Other Liabilities" in the past, and also recognized the higher slippages. The internal audit report of the bank revealed 'involvement of senior Bank officials, including former Key Management Personnel (KMP), in overriding key internal controls'. The bank reported the likely involvement of senior management in the accounting fraud to the Central Government. IndusInd Bank share price has fallen 19% in three months and 17% YTD. Over the past one year, IndusInd Bank shares have declined 45%, while the stock is down 13% in three years. At 9:25 AM, IndusInd Bank share price was trading 0.53% higher at ₹ 809.05 apiece on the BSE.
India Gazette
7 days ago
- Business
- India Gazette
SEBI bars five IndusInd Bank executives in insider trading case involving Rs 19.78 Crore
New Delhi [India], May 29 (ANI): The Securities and Exchange Board of India (SEBI) has passed an interim order barring five former and current senior executives of IndusInd Bank from participating in the securities market, alleging their involvement in insider trading that helped them collectively avoid losses worth nearly Rs 19.78 crore. SEBI's ex-parte interim order, issued on May 28, names the bank officials including Arun Khurana (Executive Director and Deputy CEO), Sumant Kathpalia (Managing Director & CEO), Sushant Sourav (Head of Treasury Operations), Rohan Jathanna (Head of GMG Operations), and Anil Marco Rao (Chief Administrative Officer, Consumer Banking). Some of these officials have already resigned from their roles at the bank. SEBI said 'The bank accounts of Noticees are impounded to the extent of amount as mentioned in last column of Table 10 above, and Noticees are directed to open fixed deposit account(s) in their names so as to credit or deposit the aforesaid impounding amount with a lien marked in favour of SEBI and the amount kept therein shall not be released without permission from SEBI'. SEBI launched a suo motu investigation after observing a sharp fall in IndusInd Bank's stock price following a disclosure made by the bank on March 10, 2025. The bank revealed a discrepancy in its derivative portfolio accounting, stemming from changes mandated by the Reserve Bank of India's (RBI) Master Direction issued in September 2023. SEBI, in an order, said 'Vide emails dated December 16, 2023, March 06, 2024 and May 05, 2024, figures of discrepancies Rs 1,572 crores, Rs 1,776.49 crores and Rs 2,361.69 crores for the period ending September 2023, December 2023 and March 2024, respectively, were circulated amongst the employees of IBL' The regulator found that the bank's internal team had discovered the discrepancies as early as September 2023 and had internally communicated the financial impact to top executives, including those now under investigation, by December 2023. Despite knowing the extent of the issue, the bank delayed public disclosure until March 2025. During the period classified by SEBI as containing unpublished price-sensitive information (UPSI), from December 4, 2023, to March 10, 2025, the accused officials sold large volumes of IndusInd Bank shares. SEBI's order shows that none of them bought shares during this time, indicating deliberate attempts to offload shares before the negative news became public and the stock price crashed. On March 11, the day after the disclosure, IndusInd Bank shares dropped 27.17 per cent from Rs 900.60 to Rs 655.95. Arun Khurana alone sold 3.48 lakh shares, avoiding losses of over Rs 14.39 crore. Kathpalia sold 1.25 lakh shares, evading losses of more than Rs 5.2 crore. The remaining three officials together avoided additional losses of nearly Rs 19 lakh. In its interim order, SEBI has now frozen the officials' bank accounts to the extent of the avoided loss amounts. The market regulator also directed them to park these amounts in fixed deposit accounts with a lien in favour of SEBI. It also prohibited them from buying or selling any securities until further orders. SEBI also asked them to disclose details of their assets and financial holdings within 15 days. The regulator also clarified that its investigation is ongoing and further actions, including penalties, may follow. (ANI)
