BENGALURU/MUMBAI: Markets regulator Sebi on Wednesday banned
Kishore Biyani, the main promoter of Future Group, and four other related entities from the market for one year for insider trading in the shares of
Future Retail
. These five entities have also been barred from dealing in the shares of the same company for two years.
The
Sebi order
came at a time when the Future Group is involved in several court and arbitration cases involving global e-commerce major Amazon, which is trying to block Biyani’s deal to sell the retail business to Mukesh Ambani’s Reliance Industries (RIL). Through an earlier deal signed August 2019, Amazon had invested Rs 1,431 crore in Future Coupons, which held about 10% stake in the group flagship, Future Retail.
TOI spoke to some corporate lawyers not involved in the RIL or Amazon deals and they said the Sebi order may have some implications for the Indian company, but is unlikely to impact the Amazon pact. The Sebi order relates to trading in the shares of Future Retail using unpublished price-sensitive information by Biyani and his associates when the group was undergoing a restructuring in March-April 2017.
The order was passed against Future Corporate Resources, Kishore Biyani,
Anil Biyani
, FCRL Employee Welfare Trust, Rajesh Pathak, Rajkumar Pande, Virendra Samani and Arpit Maheshwari.
Biyani and two other entities have also been asked to disgorge — that is, to pay up the illgotten profits from the trades — nearly Rs 20 crore, including the accrued interest. Sebi also fined some of these entities, aggregating another Rs 2 crore.
Future Corporate Resources said the Sebi order would not pose a hurdle to the ongoing deal with the
Reliance Group
and that the order will be challenged in exercise of the statutory right to appeal. “Further, on merits, the Sebi Order is untenable since it treats a well-anticipated and publicly well-known impending reorganisation of the home furnishing businesses that the Future Group effected in 2017 to be unpublished information,” the statement added.
According to three senior corporate lawyers, who spoke on the condition of anonymity, the Sebi order may not directly impact the dispute with Amazon, but RIL could choose to take action in light of the latest development.
“Typically, in a large deal like RIL-Future, there are clauses drawn for situations like this. It includes options like pulling out of the deal,” one of the lawyers mentioned above said.
Another senior lawyer said: “The dispute between Future Group and Amazon over the RIL deal is over two different contracts. It is unlikely Biyani's personal market dealings will have any immediate impact on the court proceedings.” These lawyers added that Biyani could challenge the Sebi order at the Securities Appellate Tribunal (SAT) and eventually it might land in the Supreme Court.