An independent review has placed IndusInd Bank under investigation after it discovered possible insider trading activities among its executive leadership. The bank confirmed that the forensic investigation results may lead to insider trading regulation enforcement according to a Reuters report which presented serious concerns.
The Grant Thornton audit revealed that former CEO Sumant Kathpalia and deputy Arun Khurana made IndusInd Bank share transactions after discovering internal accounting problems which they knew about before public disclosure. The bank disclosed these warning signs through a regulatory filing which stated it would follow its Insider Trading Code and relevant laws to address the findings.
The discovery of a $230 million accounting discrepancy in March emerged from years of incorrect derivatives trading accounting at the bank. Kathpalia resigned because of moral responsibility and Khurana left his position because of “unfortunate developments.”
Moody’s Ratings issued a negative outlook downgrade for IndusInd Bank because of its financial stability concerns. The fifth-largest private lender in India faces potential consequences that could affect investor trust and regulatory oversight.
