InvestorQ : Why has Kishore Biyani been banned from accessing the capital markets by SEBI?
swati Bakhda made post

Why has Kishore Biyani been banned from accessing the capital markets by SEBI?

Sam Eswaran answered.
11 months ago

Kishore Biyani, the CEO of the Future Group, as well as his brother Anil Biyani have been barred by SEBI from accessing capital markets in any form for the next one year from the date of this order. This would mean that both brothers can neither trade in the markets, nor can they raise fresh equity capital from the markets, either from retail or QIBs.

This order pertains to insider trading allegations against the two brothers in the midst of the demerger of the Future group back in 2017. SEBI’s contention in this context is that both the Biyani brothers traded in Future Retail through a clutch of group companies. What is actually the issue is that they traded based on unpublished insider information.

According to SEBI, both being insiders knew about the swap ratio at which the demerger will happen and they made the best of this information by taking appropriate positions in the market accordingly. In the process, both the brothers made huge profits on the stocks based on sensitive unpublished information which was available to the market.

Since both were privy to the finer details, it does make a strong case for insider trading against the Biyani brothers. This insider trading was allegedly done just ahead of the demerger of the group companies, which were subsequently split into a number of distinct units. According to SEBI, both brothers had access and also used the information.

While the Biyani brothers have approached SAT against the SEBI order, it is likely to have a repercussion on the RIL deal. Amazon has already made allegations of insider trading ahead of the RIL deal. This is certainly likely to have a bearing on the Reliance Retail – Future Retail merger deal. The outcome could be interesting for Indian retail industry.