The Securities and Exchange Board of India (SEBI) is probing Bharat Financial Inclusion and IndusInd Bank for alleged disclosure lapses and insider trading violations.
According to persons aware of the development, the probe was initiated after the chairman of Bharat Financial made statements regarding the merger of the micro finance institution (MFI) with IndusInd Bank even before the approval of the National Company Law Tribunal (NCLT) was formally received.
Confirms merger
On April 24, BFI chairman P.H. Ravikumar, during a media interaction, confirmed the merger of BFI with IndusInd Bank even though NCLT had reserved its order after hearing the matter on April 23.
While the micro finance institution clarified to the NCLT and made various submissions after which the merger got the go-ahead from the tribunal, the SEBI probe is looking into alleged lapses in terms of the disclosures that were required to be made by both the listed entities to the stock exchanges in the light of the statements made by Mr. Ravikumar.
“SEBI is looking at whether the companies made any effort to clarify to the exchanges and investors as there was no clarification given to the stock exchanges. Also, was the top management of the companies apprised of the matter and if ‘yes’, then why no steps were taken to provide a clarification immediately,” said a person familiar with the probe.
The scope of SEBI’s probe extended to IndusInd Bank as well, as the MFI was merging into the listed private sector banking entity. On April 30, however, the bank said in a stock exchange statement that the NCLT heard the petition on April 23 and has reserved the matter for final orders.
The capital market regulator is also looking into the details of entities that dealt in the shares of BFI and IndusInd Bank during the time the statement was made, to evaluate ensure if whether there were any instances of insider trading violations.
Email queries sent to SEBI, IndusInd Bank and BFI remained unanswered till the time of going to press.
