IndusInd Bank Shares Edge Up Despite SEBI's Insider Trading Ban on Former Top Executives
IIE DIGITAL DESK : May 29, 2025, IndusInd Bank's shares experienced a modest rise of approximately 1%, reaching ₹814.30 on the NSE during morning trading. This uptick occurred even as the Securities and Exchange Board of India (SEBI) imposed a ban on the bank's former CEO, Sumant Kathpalia, and four other senior officials from participating in the securities market due to allegations of insider trading.
SEBI's interim order, issued on May 28, 2025, accuses the executives of trading IndusInd Bank shares while in possession of unpublished price-sensitive information (UPSI) concerning significant accounting discrepancies in the bank's derivatives portfolio. These discrepancies, amounting to over ₹1,500 crore, were publicly disclosed in March 2025, leading to a substantial drop in the bank's share price .
The individuals named in the SEBI order include
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Sumant Kathpalia, former Managing Director and CEO
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Arun Khurana, former Executive Director and Deputy CEO
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Sushant Sourav, Head of Treasury Operations
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Rohan Jathanna, Head of Global Markets Group Operations
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Anil Marco Rao, Chief Administrative Officer of Consumer Banking Operations
SEBI has also ordered the impoundment of approximately ₹19.78 crore from these individuals, representing the gains they allegedly made by avoiding losses through insider trading activities.
Despite the regulatory action, investor sentiment towards IndusInd Bank remains cautiously optimistic. Analysts suggest that the market's positive response may be attributed to the perception that the bank is taking steps to address past governance issues and is moving towards greater transparency. However, concerns persist regarding the bank's internal controls and the potential impact of these developments on its reputation and financial performance.
The situation underscores the importance of robust corporate governance practices and the need for financial institutions to maintain strict compliance with regulatory standards to uphold investor confidence and market integrity.
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