India’s Poonawalla Fincorp falls 5% after regulator bans MD for insider trading By Reuters
BENGALURU, Reuters – Poonawalla Fincorp shares fell 5% Thursday following a ban by India’s regulator on managing directors of non-banking financial companies and seven other securities market traders for insider trading.
The Securities and Exchange Board of India, (SEBI), found Abhay Bhutada guilty of disclosing information regarding Rising Sun Holdings’ proposal to buy a stake in Poonawalla Fincorp before the matter was made public.
Rising Sun Holdings, previously known as Magma Fincorp had purchased a majority share in Poonawalla Fincorp earlier in the year. Bhutada, at the time, was chief executive officer for Poonawalla Finance (a private subsidiary owned by Rising Sun Holdings).
SEBI was able to determine that Bhutada’s business associates traded in Magma stocks, based on bank statements and financial transactions. Rising Sun acquisition details were not disclosed to the stock markets until SEBI reviewed call records.
SEBI’s order stated that Bhutada, seven others, and the rest of them, are prohibited from dealing, buying or selling securities, pending further orders.
Reuters requested comment from Poonawalla Fincorp but Abhay Bhutada didn’t immediately reply.
In March, Magma Fincorp said it had received https://www.bseindia.com/xml-data/corpfiling/AttachHis/6c1b2d02-27dd-44f7-9cb0-76ecc2415958.pdf shareholder approval for Rising Sun Holdings’ acquisition of a majority stake in the company via preferential issue of up to 34.56 billion rupees ($470.62 million).
SEBI has also ordered that all the bank accounts involved in insider trading cases of 135.8million rupees be seize.
On Thursday, Poonawalla Fincorp shares were in lower circuit and trading at 171.90 Rupees per share. Stock gained 351.12% over the past year.
($1 = 73.4350 Indian rupees)
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