Top officials of IndusInd Bank are under the regulatory scanner with the capital market regulator Sebi examining trading details of senior officials as well as the bank’s correspondence with Reserve Bank of India (RBI) with respect to the derivative losses, Moneycontrol has learnt from people familiar with the development.
According to a source close to the matter, Sebi is examining both the trading pattern and IndusInd’s communication with RBI to ascertain if there was any violation of insider trading regulations.
“The trading pattern and communication timeline with banking regulator will be matched to see if the trading was triggered due to the RBIs communication or it was in a normal course,” said the source.
“Details of trading by top officials of the bank and also the whole list of correspondence with RBI on the derivative loss issue has been sought,” he said, adding that if any trading has been done based on RBI’s communication before it was made public, it will be a case of insider trading, and Sebi will act accordingly.
As per exchange disclosures, IndusInd Bank CEO Sumant Kathpalia’s last trading was on June 25, 2024 when he sold 50,000 shares at an average price of Rs 1,497. Out of Kathpalia’s last 10 trading incidents reported under insider trading regulations, four were about selling, two were about pledge, three about revoke and one of acquisition.
Last few years’ trading pattern of deputy CEO Arun Khurana suggests that he has been trading in the shares of the bank, mostly buying from the open market in a price range of Rs 1,000-1,200 and selling at Rs 1,500 or above. Out of Khurana’s last 10 trading disclosures, nine were of selling and one of buying from the open market.
Sebi has also sought the trading details of key managerial persons (KMP) and senior management personnel (SMP) from October 2024 till date and the data has already been furnished by the bank, Moneycontrol has learnt.
A highly-placed source with knowledge of the matter said there may have been a few requests from certain senior management personnel to cash out their ESOPs during this period which is under investigation.
“However, the management has been turning down requests for ESOP encashments. It seems that due care was taken to ensure that people who may have been involved in the accounting deficiencies were not given permission by the internal compliance department to cash out their ESOPs,” said the banker who did not wish to be named.
Moneycontrol has written to Sebi and IndusInd Bank seeking a comment on the matter. The responses are still awaited.
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