In an interim ex-party order, the Securities and Exchange Board of India (Sebi) has formerly Chief Executive Officer of Indusind Bank Sumant Kathpalia excluded, and four others to gain access to the securities market on alleged prior knowledge in the bank’s shares.
The supervisor found that these persons were aware of the accounting discrepancies in the bank’s derivatives portfolio at least 15 months before the bank made it public, so that Sebi’s prior knowledge trade rules violate.
Sebi has also seized £ 19.78 crore of the five people collective, because the loss avoided from the sale of their shares based on the non -published price -sensitive information (UPSI).
Together with the former CEO, others from the market include the former deputy CEO Arun Khurana of the bank, head of Treasury Operations Sushant Sourav, head of GMG Operations Rohan Jathanna and Chief Administrative Officer of Consumer Bank Activities.
The supervisor began to investigate the case after a decrease of more than 27 percent in the stock price of Indusind Bank on 10 March 2025, after the bank had announced the discrepancies and an impact of 2.35 percent on the assets of the bank of 1,529 crore.
Sebi discovered that management was first aware of the issues on 26 September 2023, via an interdepartmental team after the main direction of RBI, and even internally recognized a “huge impact” because of these discrepits on December 4, 2023.
During the UPSI period before the problems were made public, Arun Khurana had sold 3.48 Lakh shares, Sumant Kathpalia had sold 1.25 Lakh shares, while the others each sold 1,000-2,000 shares at different times.
“Consider trade with prior knowledge while they are an insider and are in possession of upsi count on committing fraud on innocent investors and endangering their interest, who had no access to material information,” said Sebi’s Kamlesh Varsshney member in the order.
Furthermore, stock exchanges confirmed that these officials did not submit a trade plan for FY24 and FY25, which in advance described transactions for insiders includes UPSI. Accordingly, Khurana is assigned to dismiss £ 14.39 Crore and Kathpalia £ 5.2 crore.
The supervisor expects other investigations into disclosure and trade with prior knowledge by these officials and others who will be completed quickly, said it in the order.
The managers against whom orders have been adopted can submit their reply within 21 days and can indicate whether they want to use the possibility of personal hearing.
Published on 28 May 2025
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