The company's stock was trading at Rs 60.02 in February and went up to Rs 147 in May and was at Rs 190 on August 16. The scrip was down by 4.98% on Thursday and closed at Rs 171.90.
Managing director of Poonawalla Fincorp Abhay Bhutada resigned on Thursday, a day after being barred from the securities markets by Sebi for alleged insider trading. Bhutada has resigned from the board with effect from September 16, 2021, Poonawalla Fincorp said in a statement. Vijay Deshwal, CEO of Poonawalla Fincorp, will run the operations, the statement added.
Sebi on Wednesday barred Bhutada and seven other entities from the securities market for alleged insider trading in the shares of Poonawalla Fincorp, earlier known as Magma Fincorp. A statement from Poonawalla Fincorp said Bhutada had stepped down in the broader interest of the company and its stakeholders.
Adar Poonawalla-controlled Rising Sun Holdings acquired a majority stake in NBFC Magma Fincorp and infused fresh capital of Rs 3,456 crore into the company. The announcement was made in February. With 60% shares owned by Rising Sun Holdings, Magma Fincorp became part of the Poonawalla Group in May and was later rebranded as Poonawalla Fincorp. Poonawalla took over as chairman of Magma Fincorp in May.
The company’s stock was trading at Rs 60.02 in February and went up to Rs 147 in May and was at Rs 190 on August 16. The scrip was down by 4.98% on Thursday and closed at Rs 171.90.
Sebi said preliminary examination revealed that trades took place during February 2021. Rising Sun Holding announced plans to pick up a controlling stake in Magma Fincorp on February 10. Bhutada was CEO of Poonawalla Finance and had access to sensitive information regarding the acquisition.
Apart from Bhutada, the individuals named in the Sebi order include Saumil Shah, Rakesh Rajendra Bhojgadhiya, Abhijit Pawar, Amit Agarwal, Surabhi Kishore Shah and Murlidhar Bagranglal Agarwal. Bhutada was connected to Bhojgadhiya, Pawar and Saumil Shah who had family and financial relationship with the others. Sebi also said there were phone calls, fund transfers and trading in the Magma scrip in advance.
They have been jointly made liable for Rs 13.5 crore. Out of this, Bhutada, Bhojgadhiyan and Pawar will be liable for Rs 8.3 crore. As per Sebi orders, this deposit would have to be made in an escrow account within 15 days of the order.
Trading window will also remain closed for Bhutada and seven other entities and their relatives for dealing in securities of Poonawalla Fincorp from September 16 to 18.