Poonawalla Fincorp MD resigns on Sebi action

Abhay Bhutada, managing director of Poonawalla Fincorp (PFL), has resigned from his post after the Securities and Exchange Board of India (Sebi) barred him from accessing the securities market for alleged insider trading in shares of PFL.

Vijay Deshwal, group chief executive officer, will run the operations of the company, PFL said in a statement.

Meanwhile, the finance company also moved its Chief Risk Officer (CRO) Girish Poddar to credit monitoring role in the organisation and appointed

Sharad Pareek as the new CRO for a fiveyear term.

Bhutada decided to step down from the MD’S post in the broader interest of the company and its stakeholders, PFL informed the BSE. The PFL stock closed five per cent lower at ~172.15 per share on BSE.

Apart from Bhutada, Sebi also barred seven others from accessing the securities market for alleged insider trading in shares of PFL — formerly known as Magma Fincorp. The regulator also impounded ill-gotten gains of ~13.6 crore.

Sebi in its order said its surveillance alert system detected suspicious trading patterns in the shares of Magma Fincorp ahead of the acquisition of a controlling stake by Adar Poonawallaled Rising Sun Holding (RSHPL) in February 2021.

An analysis done by Sebi showed that a group of connected entities had taken long positions in Magma and later squared off their positions, generating substantial profits.

After Magma made a preferential allotment of ~3,456 crore to the Poonawalla Group, its scrip hit the upper circuit for seven straight trading sessions.