Future Retail has said that the SEBI order on February 3 barring Kishore Biyani and 7 others from the securities market will not impact its ongoing deal with Reliance Industries.

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The Securities Exchanges Board of India (SEBI) on Wednesday barred Future Group Chairman Kishore Biyani, his brother Anil Biyani, Future Corporate Resources Private limited (FCRL), FCRL Employee Welfare Trust and 4 others from the securities market for a year after an investigation into a 2017 case revealed insider trading by them in the scrip of Future Retail (FRL).

However, Future Retail, in a regulatory filing, said that it will challenge the order as on merits, the SEBI order is untenable "since it treats a well-anticipated and publicly well-known impending reorganization of the home furnishing businesses that the Future Group effected in 2017 to be unpublished information."

An investigation by SEBI had revealed that the notices traded in shares of Future Retail on the basis of unpublished price sensitive information (UPSI) violating SEBI norms during the period of March 10 and April 20, 2017.

All those named in the order have also been barred from buying or selling in the securities of Future Retail for two years.

The investigation observed that the Biyanis opened a trading account for FCRL, which then traded in Future Retail's shares before a demerger decision of FRL was publicly announced.

The SEBI order pertains to trades executed when FCRL was merged into Suhani Trading and Investment Consultants Private Limited.

"I find that the material available on record does not indicate the amount of specific loss caused to investors or group of investors as a result of the default by the notices or that default by the notices is repetitive in nature," the order read.

However, SEBI has directed that the wrongful gains made by them are to be disgorged

Accordingly, FCRL, Kishore Biyani and Anil Biyani have been directed to jointly and severally disgorge an amount of around Rs 17.78 crore along with an interest of 12 percent per annum from April 20, 2020, till the date of payment.

FCRL and FCRL Employee Welfare Trust have been directed to jointly and severally disgorge Rs 2.75 crore plus 12 percent interest from April 20, 2020.

In addition to this, FCRL, Kishore Biyani and Anil Biyani will have to each pay a Rs 1 crore fine within 45 days

Apart from the Biyanis and FCRL, individuals barred from the securities market include Rajesh Pathak, who was then company secretary of FCRL, Rajkumar Pande, CFO of FCRL, Virendra Samani, legal counsel for Future Group and Arpit Maheshwari, who was Deputy Manager at Future Retail at the time.

(Disclosure:

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First Published:Feb 4, 2021 10:08 AM IST