An illuminated signboard of IndusInd Bank is seen outside one of its branches, in New Delhi.
Credit: Reuters File Photo
India’s securities market regulator has banned some former as well current top executives of IndusInd Bank Ltd., backed by the billionaire Hinduja brothers, from accessing the capital markets in a case of alleged insider trading, according to an initial order.
The regulator found former Chief Executive Officer Sumanth Kathpalia and former Deputy CEO Amit Khurana allegedly indulged in trading of the lender’s shares while in possession of price-sensitive information, the Securities and Exchange Board of India order said. The regulator’s directions are also applicable to the bank’s head of treasury, head of global markets group and the chief administrative officer.
The ruling comes after some members of the lender’s top management resigned last month in the wake of Rs 2,000-crore accounting discrepancy related to the bank’s derivatives trades. Kathpalia in his resignation letter said he took “moral responsibility, given the various acts of commission/omission that have been brought to my notice.”
SEBI’s investigation found that IndusInd’s insiders were aware of the accounting discrepancy by December 2023, even as the lender made the information public on March 10, triggering a record fall in its stock. With this knowledge, the insiders avoided losses to the tune of Rs 1,692 crore while trading in the shares of the bank, the regulator said. That money has been impounded.
The regulator has given 21 days to the accused to respond to its initial order.