INDUSIND BANK - INSIDER TRADING The Securities and Exchange Board of India (Sebi) has barred former IndusInd Bank CEO Sumant Kathpalia and four other senior officials from trading in the securities market, following allegations of insider trading linked to a massive accounting discrepancy. In an interim order issued on May 28, Sebi said that these individuals had traded in IndusInd Bank shares while being in possession of unpublished price sensitive information (UPSI), violating insider trading rules. An internal review had uncovered issues following the implementation of the RBI’s 2023 Master Direction on derivative accounting. The bank estimated an adverse impact of “approximately 2.35 per cent of Bank’s Net Worth as of December 2024.” Sebi found that senior management had been aware of the issue since at least December 2023 but failed to disclose the information to the public in time. It can be prima facie inferred that the MD & CEO was aware about the probable huge impact of the discrepancy in the account balances of the Derivative portfolio. Despite internal estimates indicating a hit of ₹1,749.98 crore — later confirmed to be ₹1,572 crore for the quarter ending September 2023 — the bank only informed the stock exchanges in March 2025. Meanwhile, Sebi observed that the five officials sold shares during this UPSI period, potentially avoiding losses worth nearly ₹20 crore. Sumant Kathpalia alone sold 125,000 shares, while Arun Khurana offloaded nearly 350,000 shares. *Sebi has impounded their bank accounts and directed the officials to deposit the avoided loss amounts in fixed deposits with a lien in favour of Sebi.* The trading done by insiders, while being in possession of UPSI caused notional monetary loss to the innocent investors who did not have free and equal access to the crucial/material information. The five individuals are prohibited from buying, selling, or otherwise dealing in any securities, either directly or indirectly.