The Securities Appellate Tribunal (SAT) rejected former IndusInd Bank Deputy CEO Arun Khurana’s plea to access 1.7 terabyte (TB) data that the markets regulator accessed in the insider trading case. SAT said the request to access the entire data does not merit consideration because no show-cause notice was issued against the appellant. A noticee shall be entitled for the relevant material at the stage of adjudication, as per the tribunal’s order.
The matter pertains to allegations of insider trading when the bank’s share price tanked following its accounting lapses in the derivatives portfolio disclosed in March last year. Khurana was also the head of the bank’s global markets division which included the derivatives portfolio. Amid the chaos, he resigned the next month.
The former deputy CEO was asked to appear before Securities and Exchange Board of India (Sebi) officials on December 30 for a personal hearing. However, he moved to SAT and sought access to documents Sebi received from the bank.
Procedural Fairness
The regulator opposed giving access to the data on various grounds, such as the confidential and sensitive nature of the information. The regulator performed email searches using keyword filters and only relevant emails relied upon were shared with Khurana.
Representing the appellant, senior advocate Pesi Modi argued that Sebi read only a few selected emails and misdirected itself on various facts of the case. “SEBI’s (Securities and Exchange Board of India) refusal to grant inspection of documents, is in violation of principles of natural justice and prayed for granting the prayers made in the appeal,” Modi said.
Rs 2,000-Crore Derivatives Fiasco
IndusInd Bank’s FY25 profitability had taken an almost ₹2,000-crore hit due to the lapses in internal foreign exchange derivatives portfolio over 5-7 years. After the lender’s disclosure in March 2025, the Reserve Bank of India pushed for an external investigation by Grant Thornton. It is then that more irregularities were found in the microfinance division of IndusInd Bank, following which CEO Sumant Kathpalia and deputy CEO Khurana stepped down.
The lender’s stock price had lost a third of its value last year following the disclosure of the accounting lapses. On Friday, it closed almost 2% lower ₹917 on the BSE. While the stock has recovered from the significant losses in 2025, it is up only 2% since March.