SEBI Bans Poonawalla Fincorp MD From Stock Markets For Insider Trading

Stock exchange regulator Securities and Exchange Board of India (SEBI) banned director Abhay Bhutada of Poonawalla Fincorp, owned by Adar Poonawalla, from trading in the securities market on charges of insider trading. Seven other people, allegedly involved in the misdeeds, have also been banned from trading. SEBI has further imposed a collective fine of Rs 13.58 crore.

The others involved are Saumil Shah, Surabhi Kishore Shah, Amit Agarwal, Murlidhar Bagranglal Agrawal, Rakesh Rajendra Bhojgadhiya, Rakesh Rajendra Bhojgadhiya HUF and Abhijit Pawar.

The alleged breach dates back to when businessman Adar Poonawalla publicly announced his intention to acquire a majority stake in the former Magma Fincorp. SEBI’s order stated that the system had received system-generated warnings in script from the former Magma Fincorp Limited in February 2021, approximately the same time as the acquisition.

“It is notable that during the relevant period there have been phone calls between the entities and the said phone calls were followed by money transfers. Furthermore, it is also noted that persons enjoying connection through phone calls, wire transfers, etc. have acted in Magma’s thesis prior to the aforementioned event, i.e. the publication of the company announcement,” the order read.