SEBI Bars Former IndusInd Bank CEO and Four Others from Securities Market, Know Why

The Securities and Exchange Board of India (SEBI) has taken strict action against Sumant Kathpalia, former CEO of IndusInd Bank, along with four other top executives, barring them from trading in the securities market. SEBI has also impounded ₹19.78 crore through an interim order.

The four other executives named in the directive are:

• Arun Khurana, former Executive Director and Deputy CEO
• Sushant Sourav, Head of Treasury Operations
• Rohan Jathanna, in charge of GMG Operations
• Anil Marco Rao, Chief Administrative Officer in Consumer Banking Operations

In a statement, SEBI said:

“All the Noticees, viz. Noticee Nos. 1 to 5, are hereby restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever, until further orders.”

Insider Trading Allegations

According to SEBI’s investigation, the executives traded in IndusInd Bank shares while in possession of unpublished price-sensitive information (UPSI). This is a violation of India’s insider trading regulations.

The allegations stem from a Master Direction issued by the Reserve Bank of India (RBI) that had significant financial implications for the bank. During this time, the accused individuals reportedly had internal knowledge of the bank’s financial assessment and acted on it before the information became public, potentially to gain unfair financial advantage.

Larger Probe Underway

This interim action comes just days after SEBI confirmed it was probing suspected violations and accounting irregularities at IndusInd Bank. Preliminary findings suggest potential fraud worth ₹3,400 crore, which may have involved misreporting or manipulation of financial data by senior management.

SEBI’s latest move signals its intent to crack down on misuse of confidential information by corporate insiders and hold top executives accountable for regulatory breaches. Further proceedings are expected as the investigation continues.