SEBI indicates improvement in Industrial Bank’s internal trading case

Capital Markets Regulator Sebi has issued a chores for its recent interim order in Indusined Bank’s internal trading case. The market regulator made it clear that the main document in its investigation is incorrectly referred to as “board note”, but it should be described as “Note of Engagement”.

On June 6, 2025, Coregendum, Sebi explained that the board note would now be read as an engagement note (signed by CFOs and two senior officials).

The regulator initially stated that KPMG’s appointment was based on the note of the board to review the derivative issues. Coregendum makes it clear that it was actually based on the engagement note-a document is usually signed by the top company officials but it is not necessary to have a board-class communication communication.

The insider trading case revolves around the allegations that these officers sold shares of Indusind Bank while unpublished price-sensitive information (UPSI) was occupied by the bank.

According to the SEBI order, the negative financial impact of Rs 1,572 crore was identified in the internal review of the Indusined Bank – about 2.35%of its net cost. However, this information was not public in public until March 10, 2025.

Sebi’s investigation revealed that before the public declaration, Kathapalia and Khurana sold 1.25 lakh and 48.4848 lakh shares respectively. By doing so, they avoided an estimate of about Rs 20 crore.

Sebi has stabilized their bank and demat accounts to the extent of benefit and banned the trade of securities until further notice.