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Mint
29-05-2025
- Business
- Mint
IndusInd Bank share price in focus after Sebi bars former CEO, four others from securities market for insider trading
IndusInd Bank share price will be in focus 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. 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by Sebi, it was found that these senior executives allegedly traded in IndusInd Bank shares while in possession of unpublished price-sensitive information (UPSI) related to discrepancies in account balances of the bank's derivative portfolio.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 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 ₹ 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 ₹ 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. On Wednesday, IndusInd Bank share price ended 1.99% lower at ₹ 804.75 apiece on the BSE. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Economic Times
13-05-2025
- Business
- Economic Times
Govt instructs crypto exchanges to monitor J&K transactions amid money laundering concerns
The Securities & Exchange Board of India reached out to trustees of private equity and venture capital funds-also known as alternative investment funds (AIFs)-last Friday to evaluate risks related to "money laundering, terrorist financing and proliferation financing." Crypto bourses are directed to particularly watch out and report trades involving 'private wallets' that allow managing of virtual digital coins without relying on third parties like exchanges or crypto custodians. Tired of too many ads? Remove Ads Crypto TrackerPowered By TOP COINS TOP COIN SETS XRP 212.82 ( 4.32 %) Buy BNB 55,701 ( -0.45 %) Buy Tether 84.96 ( -0.55 %) Buy Bitcoin 87,01,920 ( -2.45 %) Buy Ethereum 2,09,557 ( -3.16 %) Buy Mumbai: Indian cryptocurrency exchanges have been told by the government to keep an extra eye out for transactions linked to persons located in Jammu & Kashmir and border areas. The Financial Intelligence Unit (FIU-IND), the central agency dedicated to curb money-laundering and financial crimes, communicated this to several local crypto platforms last week, two persons aware of the advisory told bourses are directed to particularly watch out and report trades involving 'private wallets' that allow managing of virtual digital coins without relying on third parties like exchanges or crypto regular banking channels are to be avoided in making payments to dubious actors, terrorists, or their handlers, cryptos, moved from an exchange wallet to a private wallet, can be directly transferred to the private wallet of the payee through a blockchain network. Under the circumstances, exchanges will have to keep tabs on withdrawals from exchange wallets to private wallets as well as deposits from them."As per the instructions, exchanges for the time being would focus more on crypto trades by persons in the border locations and report them to FIU, than the regular STR trades," said a person requesting anonymity due to the confidential nature of the communication. Just as banks share data with FIU, STR, or 'suspicious transaction report', refers to regular filing of information on suspicious trades and activities by crypto exchanges with central the past one year, exchanges have restricted free withdrawals of cryptos, insisting on enhanced due diligence of customers-enquiring about the identity of beneficiaries and the purpose of withdrawals to private wallets. The safeguards, though not fool-proof, have been put in place as it is widely perceived that cryptocurrencies can be used for illicit purposes, thanks to their pseudonymous nature and the relative ease with which they can be moved across borders."For instance, privacy coins like Monero or Zcash, which have greater privacy and anonymity, can be misused. Though these coins are not listed on Indian bourses, theoretically, a person can purchase a common and universally accepted crypto like USDT, transfer to its wallet with an exchange outside India, and then swap them for privacy coins before making payments. Such transactions would not leave a trail that Indian law enforcement agencies can track easily," said an industry person. Indeed, ever since Binance, one of the world's largest crypto exchanges, has been registered with FIU-IND, many crypto users have been transferring part of their coin holdings to Binance wallets run from other countries."Some of the exchanges are allowing coin withdrawals once they verify that the Binance wallet belongs to the customer. But, once cryptos are moved to Binance, they can be transferred, swapped freely, or paid to anyone. Since regulations are unclear and applicability of foreign exchange laws are ambiguous in crytos, platforms find it tough to fully clamp down on such transfers once the account holder ticks the necessary boxes," said a Securities & Exchange Board of India reached out to trustees of private equity and venture capital funds-also known as alternative investment funds (AIFs)-last Friday to evaluate risks related to "money laundering, terrorist financing and proliferation financing."Among other things, the trustees were told to ask the funds houses whether they had identified the beneficial owners while on-boarding clients. AIFs are required to find out the last natural persons behind entities which own 10% or more in an investor (like companies, partnerships etc). While this could well be part of the usual regulatory drill, large AIFs have been asked to disclose the percentage of 'high-risk customers', 'percentage of clients from countries in the list prepared by the Financial Action Task Force (FATF), the global anti-money laundering body, and proportion of clients on internet-based transactions.
Economic Times
05-05-2025
- Business
- Economic Times
Small foreign stakes in listed cos face banks' regulatory barriers
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Markets Mumbai: Foreign investors planning to test the waters by buying small stakes through off-market deals in listed Indian companies are hitting a wall with banks throwing the rule book at least half a dozen large private and MNC banks, following a rigid interpretation of the law, have told such offshore investors that they can hold less than 10% in listed companies only after registering themselves as foreign portfolio investors (FPI) with the Securities & Exchange Board of India (Sebi).Banks taking such a stance have blocked a few inbound investments even though the proposed share purchases were not on the stock exchange, but planned as secondary off-market trades and preferential stems from the understanding that foreign holdings above 10% would be categorised as 'FDI' while equity interests of less than 10% would be treated as 'foreign portfolio investment'."This issue has been coming up in multiple deals recently at the time of investment. FDI and FPI are two separate investment routes. Quantum of investment, in my view, should not force an investor to change the category of investment as that would not be supported by the current structure and commercial objective," said Moin Ladha, partner at the law firm Khaitan & to commit large stakes, many (non-FPI) investors prefer single-digit holdings in listed this context, several banks hold the view that investments classified as foreign portfolio investments could be only made by Sebi recognised FPIs. Since banks are the authorised foreign exchange dealers responsible for processing the inflows, their disapproval would either stall a transaction or drive the investor to find a bank with a more realistic interpretation of the comfortable with less than 10% investments by non-FPI foreign investors believe that while such an investment should be classified as foreign portfolio investment, it's not necessary that the investor must be an FPI. So, any foreign investor-irrespective of whether it has an FPI license or not-can buy the shares. These banks think that the FDI-related paperwork, like filing of 'foreign currency gross provisional return' (FC-GPR), will not be necessary for such portfolio Foreign Exchange Management (Non-debt Instruments, or NDI)) Rules state that investment of 10% or more in a listed company would be treated as FDI. "Conversely, an investment of less than 10% by any person resident outside India is treated as foreign portfolio investment under Rule 2(t). It may be noted that this is foreign portfolio investment and is applicable for any person resident outside India. It is different from a ' Foreign Portfolio Investor ' which is registered with Sebi," said Anup P. Shah of PPS & Co, a tax and legal advisory firm."It is possible to take the view that a foreign person should be allowed to invest less than 10% in a listed company even if he is not a Sebi-registered FPI. However, this is an issue on which there is no express clarity, leading to diverse interpretations," said than 10% investment, said Ladha, can be undertaken under Schedule I of the NDI rules. "The original intent of the rules is to ease reporting and not curtail investment below 10% under Schedule I," he developments take place at a point when Sebi has broached the idea of allowing foreigners to directly buy listed stocks-the way NRIs can, albeit subject to a FDI-FPI norms are often shaped by the respective turfs of RBI (dealing with FDI) and Sebi (formulating rules on FPIs). Their inability to bridge the gaps have made the rules less flexible. For instance, an FPI must hold less than 10% in a listed company; but if it buys more shares and the holding crosses 10% to reach, say 12%, the entire 12% is considered as FDI. And, even after the FPI sells the additional shares and brings the stake below 10%, it is still considered as FDI.
Time of India
05-05-2025
- Business
- Time of India
Small foreign stakes in listed cos face banks' regulatory barriers
Mumbai: Foreign investors planning to test the waters by buying small stakes through off-market deals in listed Indian companies are hitting a wall with banks throwing the rule book at them. At least half a dozen large private and MNC banks, following a rigid interpretation of the law, have told such offshore investors that they can hold less than 10% in listed companies only after registering themselves as foreign portfolio investors (FPI) with the Securities & Exchange Board of India (Sebi). Banks taking such a stance have blocked a few inbound investments even though the proposed share purchases were not on the stock exchange, but planned as secondary off-market trades and preferential allotment. This stems from the understanding that foreign holdings above 10% would be categorised as 'FDI' while equity interests of less than 10% would be treated as 'foreign portfolio investment'. "This issue has been coming up in multiple deals recently at the time of investment. FDI and FPI are two separate investment routes. Quantum of investment, in my view, should not force an investor to change the category of investment as that would not be supported by the current structure and commercial objective," said Moin Ladha, partner at the law firm Khaitan & Co. Hesitant to commit large stakes, many (non-FPI) investors prefer single-digit holdings in listed entities. In this context, several banks hold the view that investments classified as foreign portfolio investments could be only made by Sebi recognised FPIs. Since banks are the authorised foreign exchange dealers responsible for processing the inflows, their disapproval would either stall a transaction or drive the investor to find a bank with a more realistic interpretation of the regulations. Agencies Banks comfortable with less than 10% investments by non-FPI foreign investors believe that while such an investment should be classified as foreign portfolio investment, it's not necessary that the investor must be an FPI. So, any foreign investor-irrespective of whether it has an FPI license or not-can buy the shares. These banks think that the FDI-related paperwork, like filing of 'foreign currency gross provisional return' (FC-GPR), will not be necessary for such portfolio investments. The Foreign Exchange Management (Non-debt Instruments, or NDI)) Rules state that investment of 10% or more in a listed company would be treated as FDI. "Conversely, an investment of less than 10% by any person resident outside India is treated as foreign portfolio investment under Rule 2(t). It may be noted that this is foreign portfolio investment and is applicable for any person resident outside India. It is different from a ' Foreign Portfolio Investor ' which is registered with Sebi," said Anup P. Shah of PPS & Co, a tax and legal advisory firm. "It is possible to take the view that a foreign person should be allowed to invest less than 10% in a listed company even if he is not a Sebi-registered FPI. However, this is an issue on which there is no express clarity, leading to diverse interpretations," said Shah. Less than 10% investment, said Ladha, can be undertaken under Schedule I of the NDI rules. "The original intent of the rules is to ease reporting and not curtail investment below 10% under Schedule I," he said. The developments take place at a point when Sebi has broached the idea of allowing foreigners to directly buy listed stocks-the way NRIs can, albeit subject to a cap. The FDI-FPI norms are often shaped by the respective turfs of RBI (dealing with FDI) and Sebi (formulating rules on FPIs). Their inability to bridge the gaps have made the rules less flexible. For instance, an FPI must hold less than 10% in a listed company; but if it buys more shares and the holding crosses 10% to reach, say 12%, the entire 12% is considered as FDI. And, even after the FPI sells the additional shares and brings the stake below 10%, it is still considered as FDI.
