SAT stays SEBI order barring Kishore Biyani, Future Group promoters from markets

Future Group's Kishore Biyani writes to employees, says Amazon creating ruckus

The SEBI order was pertaining to a case of alleged insider trading between March and April 2017. The regulator said in its order that Future Corporate Resources bought shares of FRL via creeping acquisition to consolidate promoter group’s shareholding.

SEBI had said that while there wasn’t enough evidence of the specific amount of specific loss caused to investors, it directed the wrongful gains made by them to be disgorged.

FCRL, Kishore Biyani and Anil Biyani were directed to jointly and severally disgorge Rs 17.78 crore with 12 percent interest from April 20, 2020, while FCRL & FCRL Employee Welfare Trust were directed to jointly and severally disgorge Rs 2.75 crore plus 12 percent interest. In addition, FCRL, Kishore Biyani and Anil Biyani were directed to each pay Rs 1 crore fine 45 days.

Future Group, in a statement said that SAT has stayed the effect and operation of SEBI's order accusing the promoters of the Future Group of insider trading in the context of purchases of Future Retail shares made in March 2017.

Also read: What prompted Kishore Biyani to sell his business to RIL

The company said the restructuring of the home furnishing businesses in the Future Group where the physical store format of Future Retail and online store format of Future Enterprises were demerged into a new company had been well known in the public since 2016.

Future Group counsel Somasekhar Sundaresan argued in SAT that the actual terms of the restructuring were initiated only in April 2017, while the purchases were made in March to avail of the creeping acquisition limits under the takeover regulations.

He also argued that the home furnishing business of Future Retail was a minuscule component of Future Retail’s business and was hardly material for price discovery for shares of Future Retail.

"Sebi counsel Ravi Kadam argued that the proximity of the purchases would point to seeking to benefit from information about the restructuring and that Future Group had stated to stock exchanges in February 2017 that actual terms of the transaction had not been finalised. Future Group counsel countered arguing that the generic reference to the term “information” is vague since information about the transaction being in the offing was in the public domain and indeed the actual terms of the transaction were discussed and initiated only in April 2017 while the purchases had been made in March 2017," the company said in a statement.

The promoters of Future Group have been asked to deposit a sum of Rs 11 crore as an interim measure, against which the SEBI order has been stayed.

The case will now come up on April 12, 2021.