SEBI bars Kishore Biyani from accessing securities market for 1 year

Andrew Cummings
February 4, 2021

After this, Future Group filed a plea with the Delhi High Court.

A spokesman the two Biyani brothers did not immediately respond to a request for comment.

What is the insider trading case?

SEBI said Biyani and his brother traded in shares of FRL through a group company on the basis of unpublished price sensitive information before a demerger of certain businesses of Future Retail that pushed its share price higher. A team was also created by FRL on March 14, 2017.

The investigation observed that Future Retail had made an announcement on April 20, 2017 during market hours on the exchange titled "Outcome of Board Meeting" stating a Composite Scheme of Arrangement between Future Retail Limited and Bluerock eServices Private Limited and Praxis Home Retail Private Limited and their respective shareholders. The market regulator said the information related to mergers, demergers, acquisitions, etc., qualified as UPSI.

They are also restrained from buying, selling or dealing in FRL shares, directly or indirectly, for two years.

Biyani and two other entities have also been asked to disgorge - that is, to pay up the illgotten profits from the trades - almost Rs 20 crore, including the accrued interest. Apart from this, SEBI has also imposed a penalty of Rs 3.7 crore on Biyani and a few others.

During the period of restraint, as directed in para 33 above, the existing holding of securities, including the units of mutual funds, of the concerned noticees, shall remain under freeze. These lawyers added that Biyani could challenge the Sebi order at the Securities Appellate Tribunal (SAT) and eventually it might land in the Supreme Court.

The SEBI order pertains to trades executed when FCRL merged into Suhani Trading and Investment Consultants.

The ban comes as Biyani and his flagship Future Retail are embroiled in a battle with Inc. over Biyani's attempt to sell his retail assets to Reliance Industries alleviate a cash crunch. This deal has been challenged by e-commerce giant Amazon in courts.

TOI spoke to some corporate lawyers not involved in the RIL or Amazon deals and they said the Sebi order may have some implications for the Indian company, but is unlikely to impact the Amazon pact.

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