Insider trading case: Kishore Biyani moves SAT against SEBI ban

Our Bureau Mumbai | Updated on February 06, 2021

Kishore Biyani, Promoter of the Future Group   -  KAMAL NARANG

The market regulator had barred the Future group promoter from the capital market

Kishore Biyani, the promoter of Future Group, has moved the Securities Appellate Tribunal (SAT) seeking to overturn the Securities and Exchange Board of India (SEBI) order barring him from accessing the capital market for a year.

Biyani, who also owns Future Retail Ltd (FRL), is challenging the SEBI order that had barred him from buying, selling or dealing in securities of FRL.

Last week, market regulator SEBI had barred Biyani in an insider trading case between March and April 2017. SEBI said its probe since 2017 found that Biyani had used unpublished price-sensitive information (UPSI) to trade in Future Retail shares.

The regulator had found Biyani and others guilty of insider trading in the shares of Future Group’s retail arm Future Retail Ltd (FRL), prior to the announcement about the consolidation when FCRL was merged into Suhani Trading and Investment Consultants. Basically, it consolidated the group’s offline and online home retail business into a single entity.

The regulator also barred Future Corporate Resource, Employee Welfare Trust, and four others from tapping the market for a year.

‘Order is untenable’

In response to the SEBI’s order on February 3, a Future Group spokesperson had said: “On merits, the SEBI order is untenable since it treats a well-anticipated and publicly well-known impending reorganisation of the home furnishing businesses that the Future Group effected in 2017 to be unpublished information. The order will be challenged in exercise of the statutory right to appeal.”

This comes at a time when the Delhi High Court is hearing a plea by Amazon seeking directions to order enforcement of the award by Singapore’s Emergency Arbitrator (EA) restraining Future Retail from going ahead with its Rs 24,713 crore deal with Reliance Retail.

‘No impact on Reliance deal’

In its statement to the exchanges, the Future Group said the SEBI’s order would have no impact on its deal with the Reliance Group. “Order will have no impact on the ongoing Scheme of Arrangement of the Company. We understand that the relevant parties propose to challenge this order in exercise of their statutory right to appeal,” it said.

In connection with a bar on dealing in securities, in a press statement, a Future Group spokesperson said, “It has taken care to exclude dealings in securities under any impending Scheme of Arrangement. Therefore, the SEBI order would not pose a hurdle to the ongoing Scheme of Arrangement with the Reliance Group.”

Meanwhile, at least five supplier companies have dragged multiple companies of the Future Group to the insolvency tribunal over unpaid dues.

An e-mail sent to a Future Group spokesperson remained unanswered till press time.

Published on February 06, 2021

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