The Securities and Exchange Board of India (SEBI) has barred Abhay Bhutada, director of Poonawalla Finance, and 7 others from accessing the stock exchange after alleged trading .

In a 46-page interim order, SEBI said the eight entities had made total wrongful gains of Rs 13.58 crore through trading in shares of Magma Fincorp (now Poonawalla Fincorp) round the time it had been acquired by Rising Sun Holdings (RSHPL).

“All the Entities, viz: Entity nos. 1 to eight are restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever until further orders,” the market regulator said within the interim ex-parte order.

RSHPL had earlier this year acquired a controlling stake within the NBFC through an equity infusion of Rs 3,456 crore. Bhutada was director and CEO of Poonawalla Finance, a subsidiary of RSHPL.

Bhutada allegedly passed on unpublished price sensitive information (UPSI) to some connected entities, consistent with SEBI’s interim order. The entities allegedly bought shares supported this information, before the news of the acquisition was made public, and made profits after the deal was announced.
SEBI said it had received system-generated trading alerts within the scrip of Magma Fincorp for the month of February 2021, round the time the announcement of the acquisition was made. The market regulator began a preliminary exam following these alerts.

SEBI analysed call records, financial statements and bank statements to form connections between the entities.

“Based on the discussions and factual findings on connections, phone calls and funds transfers amongst various Entities also as transmission of UPSI from Entity no. 1 (Bhutada) to other Entities, it can now be clear held that the Entities, by pursuing a routine , have administered trading activities within the scrip of Magma, wherein each Entity has played his / her respective part in pursuance of the said routine ,” SEBI said.