Former IndusInd Bank CEO Sumant Kathpalia has offered ₹5.2 crore to settle insider trading charges brought against him by the Securities and Exchange Board of India (SEBI), as per the news reports. The case pertains to unlawful trading based on undisclosed accounting discrepancies at the bank.
Sumant Kathpalia, formerly at the helm of IndusInd Bank, has submitted a settlement application to SEBI offering ₹5.21 crore. The case revolves around allegations that Kathpalia and other executives sold bank shares while in possession of unpublished price-sensitive information (UPSI) relating to a ₹1,529 crore discrepancy in the bank’s derivatives portfolio.
According to SEBI's interim order dated May 8, these trades were executed months before the issue was publicly disclosed, avoiding losses from an eventual 27% drop in share price after the bank announced the discrepancies on March 10.
SEBI estimates that five individuals avoided losses totalling ₹19.8 crore by offloading shares prior to disclosure. It highlighted that the UPSI period ranged from December 4, 2023, to March 10, 2025. Kathpalia alone allegedly gained ₹5.2 crore by selling 1.25 lakh shares during this period while knowing the price-impacting information.
The bank only classified the information as price sensitive on March 4, 2025, despite internal awareness of potential fallout dating back to November 2023.
Read More: SEBI Imposes ₹10 Lakh Fine for Insider Trading in HDFC Merger Case!
As part of the proposed settlement dated July 26, 2025, Kathpalia pledged not to publicly deny any findings or create the impression that the order lacks basis. This confidentiality commitment forms a standard clause in SEBI’s settlement framework, which allows parties to settle without admitting or denying guilt in exchange for monetary penalties.
Sumant Kathpalia’s ₹5.2 crore settlement offer signals an attempt to resolve one of SEBI’s high-profile insider trading cases involving top bank executives. As SEBI evaluates the proposal, the outcome may influence how regulatory breaches within financial institutions are addressed going forward.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in securities are subject to market risks. Read all related documents carefully before investing.
Published on: Jul 31, 2025, 1:58 PM IST
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
