SEBI Bars Future Group Promoter Kishore Biyani From Accessing Securities In An Insider Trading Case

Before the demerger decision was made public, the SEBI investigation found that Biyanis opened a trading account for an entity called Future Corporate Resources Private Limited, which traded in Future Retail's shares.

New Delhi: India's market regulator Securities and Exchange Board of India (SEBI) on Wednesday banned Future Group Chief Executive Kishore Biyani and his brother Anil from entering the stock market for a year after probing insider trading in the shares of Future Retail.

According to SEBI, the two brothers traded in Future Retail shares, based on undisclosed price-sensitive details. The trading was done through a group company before the demerger of some Future Retail companies that pushed its share price higher.  SEBI passed an order in connection with a case of insider trading in 2017 when Future Group restructured some of its companies.

Kishore Biyani didn't comment on the query by ABP News. A spokesperson for the company also declined to comment, citing the legal team is studying the order.

Before the demerger decision was made public, the SEBI investigation found that Biyanis opened a trading account for an entity called Future Corporate Resources Private Limited, which traded in Future Retail's shares.

ABP News reviewed a copy of the order passed by SEBI's whole-time member Anant Barua, which imposed a penalty of Rs 3.7 crore on Biyani, four others and related entities.

The order said, "SEBI had conducted an investigation in the scrip of Future Retail Limited to ascertain whether certain persons/entities had traded in the aforesaid scrip during the period March 10, 2017 to April 20, 2017 on the basis of unpublished price sensitive information in contravention of the provisions of the SEBI Act, 1992 and SEBI (Prohibition of Insider Trading ) Regulations, 2015."

The regulator asked the Future Group entities to disgorge a sum of at least Rs 20.53 crore, the amount that these companies have wrongful gains as estimated by SEBI. Besides, the regulator has also imposed other penalties, including a penalty of Rs 1 crore each on Future Corporate Resources and Biyani brothers, who have denied the allegations of insider trading, according to the order.

The current holding of shares and units of mutual funds of the participating entities will remain frozen during the restraint period, as per the order. However, SEBI has provided that its ruling would not hinder the proposed arrangement scheme between several Future Group entities, led by Future Retail Ltd. and Reliance Retail Ventures Ltd.

Kishore Biyani, who is separately fighting a legal challenge from Amazon.com Inc over the sale of Future's retail assets is likely to challenge the SEBI's order, said sources in the know of the development.

On Tuesday, a court in New Delhi barred Future Group's sale to Reliance Industries of retail properties. If the transaction fails, Future has said its retail business risks insolvency. Future Retail shares on BSE tanked 5% to close at Rs 78.10 in a firm Mumbai market on Wednesday, valuing the company at Rs 4235.24 crore.