The Securities and Exchange Board of India (SEBI) has amended its interim order in the insider trading case involving IndusInd Bank-linked entities, correcting a key procedural reference amid ongoing regulatory scrutiny.
In its original May 28 order, SEBI had cited a “board note” as the basis for appointing KPMG in February 2024. That reference has now been corrected to “engagement note.” The clarification came through a corrigendum issued by SEBI Whole-Time Member Kamlesh C Varshney on June 6, instructing that the revised order be served on all relevant parties, including the notices, stock exchanges, depositories, registrar and share transfer agents, and banks.
The correction follows heightened focus on the role of IndusInd Bank’s board in the matter. At a recent press briefing, Reserve Bank of India (RBI) Governor Sanjay Malhotra signaled that the resignation of the bank’s CEO was a proportionate response, calling the demand for a full board exit “unreasonable.”
SEBI’s initial order had raised concerns about corporate governance at the bank, particularly regarding the appointment of KPMG during a period when insider trading allegations were under review.
On May 28, SEBI barred former managing director and CEO Sumanth Kathpalia and four other senior executives from accessing the securities market. The regulator also impounded alleged unlawful gains of ₹19.78 crore, citing trades made while in possession of unpublished price-sensitive information.
Meanwhile, the RBI on June 6 said the bank had taken adequate steps to improve its accounting standards. “The bank is doing well,” said Governor Malhotra, indicating regulatory satisfaction with the remedial measures taken. IndusInd Bank’s shares rose over 5% following the statement.
The RBI’s comments come nearly three months after the bank disclosed discrepancies in its derivatives book, which had led to a 27% plunge in its stock and triggered a wave of executive exits and regulatory inspections.
