Shares of Future Group companies plunged on Thursday after capital market regulator Securities and Exchange Board of India (SEBI) barred CEO Kishore Biyani from accessing the securities market for a year for indulging in insider trading in the shares of the company.
Apart from Kishore Biyani, who was the CMD and promoter of Future Retail Ltd (FRL), others facing the ban are Future Corporate Resources Pvt Ltd, Anil Biyani and FCRL Employee Welfare Trust.
Sebi had conducted an investigation in the scrip of FRL to ascertain whether certain persons and entities had traded during March 10, 2017 to April 20, 2017 period on the basis of Unpublished Price Sensitive Information (UPSI) pertaining to segregation of certain business of the firm.
The investigation observed that the Biyanis opened a trading account for FCRL, which then traded in Future Retail's shares before a demerger decision of FRL was publicly announced.
Sebi bars Future Group CEO Kishore Biyani from securities market for 1 year
In addition, the regulator has imposed a fine of Rs 1 crore each on Kishore Biyani, Anil Biyani and Future Corporate Resources. Besides, they have been asked to disgorge Rs 17.78 crore for the wrongful gains made by them.
However, Future Retail has said that the SEBI order will not impact its ongoing deal with Reliance Industries and the order was untenable.
In a regulatory filing, Future Retail said that it will challenge the order as on merits, the SEBI order is untenable “since it treats a well-anticipated and publicly well-known impending reorganization of the home furnishing businesses that the Future Group effected in 2017 to be unpublished information.”
At 10:35 am, the shares of Future Enterprises, Future Retail, Future Lifestyle Fashions, Future Supply Chain Solutions and Future Consumer were all locked in a 5 percent lower circuit.
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