Sebi bans ex-IndusInd CEO, 4 others

MUMBAI: Sebi passed an interim order against IndusInd Bank's former CEO and four other former & current senior executives alleging insider trading and disclosure lapses related to a hit on the lender's earnings from incorrect accounting of derivative contracts. This is the first time a bank chief has faced insider trading allegations by Sebi.

Sebi barred them from dealing in securities until further orders and impounded Rs 19.8 crore - the amount of loss allegedly avoided by the executives by selling shares before accounting discrepancies were disclosed.

The five executives - ex-MD & CEO Sumant Kathpalia, ex-deputy CEO Arun Khurana, head of treasury operations Sushant Sourav, head of global markets group operations Rohan Jathanna, and chief administrative officer of consumer banking operations Anil Marco Rao - were accused of trading in IndusInd shares while in possession of unpublished price-sensitive information (UPSI).

Sebi stated they were aware of a significant financial impact due to accounting discrepancies as early as Nov 2023, but the information was disclosed to the public only in March 2025. Sebi's probe found that the senior management knew by Nov 21, 2023, that the bank's incorrect accounting treatment of derivatives would impact its balance sheet. Internal emails showed the CFO flagged the issue on Nov 20-21, while the MD & CEO acknowledged a "huge impact" in a Dec 4 email. Despite this, the bank failed to classify the matter as UPSI until March 4, 2025. The regulator noted that material financial figures - including a Rs 1,750-crore impact for the Sept 2023 quarter - were internally finalised and circulated by Dec 11, 2023.

Khurana and Kathpalia resigned in April 2025 taking responsibility for the derivatives losses. Sebi held that this delay violated disclosure norms under listing regulations.


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