Poonawalla Fincorp MD Abhay Bhutada resigns a day after Sebi action on insider trading

Poonawalla Fincorp Managing Director Abhay Bhutada stepped down from the company on Thursday, a day after being barred from the securities markets by regulator Sebi for alleged insider trading. Bhutada has resigned from the board with effect from September 16, 2021, Poonawalla Fincorp said in a statement.

Poonawalla Fincorp Managing Director Abhay Bhutada stepped down from the company on Thursday, a day after being barred from the securities markets by regulator Sebi for alleged insider trading. Bhutada has resigned from the board with effect from September 16, 2021, Poonawalla Fincorp said in a statement. The board of directors of the company has accepted his resignation. Poonawalla Fincorp Ltd Group CEO Vijay Deshwal will continue to run the operations of the firm, the statement added. It further said the trading window under the company's Code of Conduct For Prohibition of Insider Trading shall remain closed for dealing in securities of the company for the designated persons and their immediate relatives with immediate effect from September 16 to September 18, 2021 (both days inclusive). Kolkata-based Magma Fincorp was renamed Poonawalla Fincorp a few months back, after the acquisition of the company by the Poonawalla Group of the Serum Institute of India (SII).

Sebi on Wednesday barred Bhutada and seven other entities from the securities market for insider trading in the shares of the company.

The regulator also ordered impounding of wrongful gains worth over Rs 13 crore, through an interim order.

In February 2021, Sebi's system generated insider trading alerts related to the company's shares. It was around the same time when an announcement was made regarding Rising Sun Holding Pvt Ltd (RSHPL), part of the Poonawalla Group, acquiring a controlling stake in Magma Corp.

Following the alerts, Sebi conducted a preliminary examination into the shares of Magma Fincorp to check whether there were insider trading activities in the counter.

As per the order, Sebi said Bhutada, who had access to unpublished price sensitive information (UPSI), seemingly engaged in fraudulent activities by way of transmitting the information to multiple connected entities.

Before this, Bhutada was the Managing Director and CEO of Poonawalla Finance, a subsidiary of RSHPL. Stock of Poonawalla Fincorp closed at Rs 172.15 apiece on BSE, down 5 per cent from the previous close.