Sebi bars Biyani for insider trading breach

The Securities and Exchange Board of India (Sebi) on Wednesday barred Future Group founder Kishore Biyani from the capital markets for a period of one year for alleged breach of insider trading regulations.

The regulator directed Biyani and three other entities to disgorge more than ~20 crore made wrongfully by dealing in shares while in possession of unpublished price sensitive information (UPSI).

The matter dates back to 2017, when company Biyani and other ‘insiders’ traded in shares of Future Retail during the period of UPSI, pertaining to a scheme of arrangement involving its home retail businesses. Sebi has also imposed a ban on Biyani and four other entities from dealing in shares of Future Retail for a period of two years.

“I find that violations committed by the noticees are serious in nature and calls for regulatory directions for debarment from the securities market and for disgorgement of wrongful gains made,” said Sebi whole time member Ananta Barua in an order.

Sebi issued three set of show cause notices to Biyani and others in January 2020 following in investigation in the scrip of Future Retail to ascertain whether any person or entities connected to the company traded while in possession of UPSI. The noticees submitted their replies in July 2020 and appeared for personal hearing in October 2020.

In their response, they argued the that information about the transaction was “generally available” through media reports and does not constitute UPSI. Further, they argued that the information was not price sensitive as the home retail businesses constituted a “significantly small and miniscule portion” of Future Retail’s overall business.

Sebi observed that “generally available information” is one that is accessible to the public on “non-discriminatory basis” such as the stock exchange platform. Sebi also observed that the share price of Future Retail had rallied close to 5 per cent after the corporate announcement was made.

The regulator also looked at other facts and circumstances to arrive at the discussion that the information pertaining to the scheme of arrangement at Future Retail was an UPSI and trading while in possession of it was violation of securities regulations.