Sebi has banned Future Group founder Kishore Biyani, his brother Anil Biyani and Future Corporate Resources Ltd (FCRL) from accessing the securities market for one year for indulging in alleged insider trading activity in the shares of Future Retail Ltd (FRL) in 2017.
The Sebi order has explicitly excluded any deal that’s awaiting approval, which means that it won’t pertain to the proposed sale of Future’s retail assets to Reliance Retail.
“Debarment/restraint/freeze imposed under this order shall not apply to those existing holding of securities of such debarred entities, in respect of which any scheme of arrangement under Section 230-232 of the Companies Act, 2013, is approved by NCLT, requiring extinguishment of such securities and/or receipt of other securities in lieu of such securities,” the Sebi order said on Wednesday.
Future Group has approached the National Company Law Tribunal (NCLT) for approval of the Future-Reliance deal, which has already been okayed by Sebi and the Competition Commission of India but has been held up in court and arbitration owing to a challenge by Amazon.
The regulator also barred the Biyani brothers and FCRL from buying, selling, or dealing in the shares of FRL directly or indirectly for two years and imposed a penalty of Rs 1 crore on each of them. Sebi has also directed the three to “disgorge” Rs 17.78 crore along with 12% interest.
The case relates to the regulator’s investigation into possible insider trading in FRL stock between March 10 and April 20, 2017. Sebi said FRL had on April 20, 2017, informed stock exchanges during market hours about the scheme of arrangement among FRL, Bluerock eServices Pvt Ltd, and Praxis Home Retail Pvt Ltd.

Stocks covered in the news

Reliance Industries Ltd. – View Detailed Analysis