New Delhi [India], May 29 : The Securities and Exchange Board of India (SEBI) has passed an interim order barring five former and current senior executives of IndusInd Bank from participating in the securities market, alleging their involvement in insider trading that helped them collectively avoid losses worth nearly Rs 19.78 crore.
SEBI's ex-parte interim order, issued on May 28, names the bank officials including Arun Khurana (Executive Director and Deputy CEO), Sumant Kathpalia (Managing Director & CEO), Sushant Sourav (Head of Treasury Operations), Rohan Jathanna (Head of GMG Operations), and Anil Marco Rao (Chief Administrative Officer, Consumer Banking).
Some of these officials have already resigned from their roles at the bank.
SEBI said "The bank accounts of Noticees are impounded to the extent of amount as mentioned in last column of Table 10 above, and Noticees are directed to open fixed deposit account(s) in their names so as to credit or deposit the aforesaid impounding amount with a lien marked in favour of SEBI and the amount kept therein shall not be released without permission from SEBI".
SEBI launched a suo motu investigation after observing a sharp fall in IndusInd Bank's stock price following a disclosure made by the bank on March 10, 2025.
The bank revealed a discrepancy in its derivative portfolio accounting, stemming from changes mandated by the Reserve Bank of India's (RBI) Master Direction issued in September 2023.
SEBI, in an order, said "Vide emails dated December 16, 2023, March 06, 2024 and May 05, 2024, figures of discrepancies Rs 1,572 crores, Rs 1,776.49 crores and Rs 2,361.69 crores for the period ending September 2023, December 2023 and March 2024, respectively, were circulated amongst the employees of IBL"
The regulator found that the bank's internal team had discovered the discrepancies as early as September 2023 and had internally communicated the financial impact to top executives, including those now under investigation, by December 2023.
Despite knowing the extent of the issue, the bank delayed public disclosure until March 2025.
During the period classified by SEBI as containing unpublished price-sensitive information (UPSI), from December 4, 2023, to March 10, 2025, the accused officials sold large volumes of IndusInd Bank shares.
SEBI's order shows that none of them bought shares during this time, indicating deliberate attempts to offload shares before the negative news became public and the stock price crashed.
On March 11, the day after the disclosure, IndusInd Bank shares dropped 27.17 per cent from Rs 900.60 to Rs 655.95.
Arun Khurana alone sold 3.48 lakh shares, avoiding losses of over Rs 14.39 crore. Kathpalia sold 1.25 lakh shares, evading losses of more than Rs 5.2 crore. The remaining three officials together avoided additional losses of nearly Rs 19 lakh.
In its interim order, SEBI has now frozen the officials' bank accounts to the extent of the avoided loss amounts.
The market regulator also directed them to park these amounts in fixed deposit accounts with a lien in favour of SEBI. It also prohibited them from buying or selling any securities until further orders.
SEBI also asked them to disclose details of their assets and financial holdings within 15 days. The regulator also clarified that its investigation is ongoing and further actions, including penalties, may follow.
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