SEBI bars 5 former IndusInd executives from markets; orders disgorgement of Rs 19.78 cr

The Securities and Exchange Board of India (SEBI) has barred former MD & CEO of IndusInd Bank Sumant Kathpalia, former executive director & deputy CEO Arun Khurana and three others have been barred from equity markets in an alleged insider trading case. The capital market regulator has also ordered disgorgement of Rs19.78 crore from the five former top executives.

Sebi passed an interim order against the five former top executives of IndusInd Bank, who allegedly sold shares worth over Rs 74 crore while in possession of unpublished price-sensitive information (UPSI).

Apart from former MD & CEO and former executive director & deputy CEO, the order was passed against senior officials Sushant Sourav, Rohan Jathanna, and Anil Marco Rao. All were part of the bank’s senior management during the relevant period.

SEBI’s investigation revealed that these executives were aware of significant discrepancies in the bank’s derivative portfolio—an issue stemming from new RBI directions on accounting issued in September 2023. Internal emails showed they were aware as early as November 2023 that these discrepancies could materially impact the bank’s net worth.

Despite this, IndusInd Bank disclosed the issue to stock exchanges only on 10 March 2025, after market hours. The disclosure caused the stock to crash 27.17% the next trading day, wiping off nearly Rs 1,530 crore in value. SEBI found that the five officials sold shares during the UPSI period—between December 4, 2023 and March 10, 2025—thereby avoiding substantial losses.