Poonawalla Fincorp Managing Director Abhay Bhutada resigned with immediate effect on Thursday, the company stated in a regulatory filing.
“Abhay Bhutada has decided to step down as the Managing Director of the Company in the broader interest of the Company and its stakeholders,” the company stated.
Adar Poonawalla-led Rising Sun Holdings’ holds majority stake in Poonawalla Fincorp, formerly called Magma Fincorp. At the time Bhutada was the chief executive officer of Poonawalla Finance, a private subsidiary of Rising Sun Holdings.
Shares of Poonawalla Fincorp fell 5% on Thursday after market regulator SEBI banned the MD and seven others from the securities market for insider trading.
Bhutada was found guilty of sharing information about Adar Poonawalla-owned Rising Sun Holdings’ proposed stake buy in the company before it was public knowledge, SEBI said in an interim order on Wednesday.
Based on call records, financial dealings and bank statements, SEBI discovered that several entities related to Bhutada traded in Magma stocks before details of Rising Sun’s acquisition were disclosed to the stock exchanges.
Bhutada and seven other people are restrained from buying, selling or dealing in securities until further orders, SEBI said in its order.
Poonawalla Fincorp and Abhay Bhutada did not immediately respond to Reuters request for a comment.
In March, Magma Fincorp said it had received shareholder approval for Rising Sun Holdings’ acquisition of a majority stake in the company via preferential issue of up to ₹3,456 crore ($470.62 million).
SEBI’s order also directs bank accounts of all entities involved to be seized to the extent of their liability in the insider trading case of 135.8 million rupees.
Shares of Poonawalla Fincorp were locked in lower circuit on Thursday and were trading at ₹171.90 apiece. For the year, however, stock gained 351.12%.
With inputs from agencies
Never miss a story! Stay connected and informed with Mint.
our App Now!!