Insider Trading: SAT stays SEBI's order barring Future Group's Kishore Biyani from markets

File image: Future Group Chairman Kishore Biyani

The Securities Appellate Tribunal (SAT) has stayed “effective operation” of the Securities and Exchange Board of India’s (SEBI) order accusing Kishore Biyani of Future Group from insider trading charges for purchases of Future Retail shares made in March 2017.

The tribunal has however directed Future Group’s promoters to deposit Rs 11 crore as an “interim measure.” The case to be heard next on April 12, 2021.

Making its representation to the tribunal, Future Group said that restructuring of its home furnishing business has been public knowledge since 2016.

“The restructuring of the home furnishing businesses in the Future Group (with the physical store format of Future Retail and online store format of Future Enterprises being demerger into a new company) had been well known in the public since 2016,” it said.

Future Group counsel Somasekhar Sundaresan argued that the actual terms of the restructuring were initiated only in April 2017 while the purchases were made in March to avail of the creeping acquisition limits under the takeover regulations.

Sundaresan also referred to a SEBI hearing where another official “exonerated Bharti Airtel Group on premise that information published in newspapers would be considered general information.”

He further pointed out that home furnishing is a “miniscule component” of the Group’s overall business and is “hardly material for price discovery of Future Retail (FRL) shares.”

In its earlier order, market regulator SEBI had barred Biyani and four others from the capital markets for a period of one year for alleged insider trading violations. It had also barred Biyani and the four others from dealing in FRL shares for a period of two years.

Making its representation, SEBI counsel Ravi Kadam argued that the proximity of the purchases would point to seeking to benefit from information about the restructuring and that Future Group had stated to stock exchanges in February 2017 that actual terms of the transaction had not been finalised.