Sumant Kathpalia, the former CEO of IndusInd Bank, has offered to pay Rs 5.21 crore as settlement charges to market regulator SEBI in order to settle the insider trading case against him, the Economic Times reported.
Earlier in May, SEBI barred the former top executive of the private lender and few other officials from the buying, selling or dealing in securities for alleged insider trading. SEBI in its interim order noted that they traded in IndusInd Bank shares even after knowing that the derivative accounting issue will have a negative impact on the lender and its share price. SEBI alleged that these officials sold the shares to avoid the losses.
All the five senior officials against whom SEBI had passed order were directed to provide a full inventory of all their assets. According to SEBI’s order, the bank accounts of all the five officials were to be impounded to the extent of Rs 19.78 crore as SEBI found this was the amount of the loss they avoided by insider trading.
In case the out of court settlement is reached, Kathpalia can settle the case without admitting or denying guilt by paying a fee, the report said.
Moneycontrol couldn’t independently verify the report.
Sumant Kathpalia had resigned from his role in April, taking moral responsibility of the aftermath of the derivatives discrepancies that caused massive decline in IndusInd Bank’s stock price. This came after RBI granted only a one-year extension to Kathpalia's tenure as the bank's CEO, despite the lender asking for a three-year term.
IndusInd Bank had earlier announced that there were certain accounting lapses in the derivative portfolio which could have a negative impact of 2.35 percent of the bank’s net worth, as of December 2024.
This sent the shares of the lender to a tail spin, with the stock falling 26 percent in a single day and wiping off major sums of investors' wealth. IndusInd Bank shares have now recovered partially, but the stock is still down nearly 18 percent in 2025 so far.
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