The Securities Appellate Tribunal (SAT) has nullified a ruling from February 2021 issued by the Securities and Exchange Board of India (SEBI), which had imposed a one-year ban on Future Group Founder and CEO Kishore Biyani, preventing him from participating in the securities market, according to Bar and Bench.
Presiding officer Justice Tarun Agarwala and technical member Meera Swarup differed with SEBI’s conclusion. SEBI had accused Biyani and Future Corporate Resources Private Limited (Future) of violating insider trading in 2017 by engaging in trades based on unpublished price sensitive information (UPSI).
The SEBI concluded that Biyani, Future, and some others had made trades based on UPSI (insider trading) concerning a proposal to demerge home retail business HomeTown from Future Retail Limited and merge it with FabFurnish. SEBI termed it the flouting of insider trading norms and barred Biyani and Future from trading for a period of one year in an order dated February 3, 2021.
After Biyani, Future and others filed an appeal, SAT stayed the order a few days later.
The SAT gave the verdict on December 20 in favour of Biyani, Future and others. It said the information about the proposed merger was already available in the public domain and was reported by multiple print and digital publications long before the contested trades took place.
The SAT also stressed that "generally available information" not only defines the information disclosed to the stock exchange but can encompass any information accessible to the public non-discriminately, including the details published in the media.
As per Bar and Bench, the SAT further said, "We find that the WTM (of SEBI) has failed to appreciate that the significance, dominance and outreach of the media in financial sector reporting impacts investor sentiment and behaviour and impacts the securities market.”
The SAT thus quashed the order of the SEBI WTM (whole time member) that had found Biyani, Future and others trading while in possession of UPSI.
