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SEBI found in the investigation that the Biyani brothers opened and traded shares by opening trading accounts named Future Corporate Resources Private Limited.
- Ban was imposed on allegations of insider trading in Future Retail
- SEBI also imposed fine of 1 crore on Biyani brothers and FCRL
The Securities and Exchange Board of India (SEBI) has banned Kishore Biyani, founder of Future Group, for a 1-year ban on capital market transactions. Apart from this, his brother Anil Biyani and Future Corporate Resources Limited (FCRL) were also banned. Biyani Bhai and FCRL Securities Appellate Tribunal (SAT) have reached against this decision of SEBI.
Ban imposed due to insider trading allegations
SEBI imposed the ban on the Biyani brothers and FCRL on 3 February following allegations of alleged insider trading. The Biyani brothers and FCRL are alleged to have insider trading in shares of Future Retail Ltd in 2017. SEBI has imposed a 2-year moratorium on Biyani brothers and FCRL to buy, sell or directly or indirectly deal in any kind of shares of Future Retail Limited. Also, a fine of Rs 1 crore has been imposed on all. SEBI has asked the three to deposit Rs 17.78 crore wrongly earned with 12% interest.
The matter is for March-April 2017
This case of insider trading is from March-April 2017. According to SEBI, the Biyani brothers purchased shares of Future Retail through a group company on the basis of unabsorbed sensitive information before de-merging some of Future Retail’s business. Future retail shares gained momentum with this move. SEBI found in the investigation that the Biyani brothers opened and traded shares by opening trading accounts named Future Corporate Resources Private Limited.
There will be no effect on the deal with Reliance
Future Retail Ltd says that SEBI’s ban will not have any impact on the deal with Reliance. The company says that this order will have no effect on future plans. On the other hand, FCRL has said in a separate statement that SEBI has excluded future securities transactions in its order. Hence, there will be no problem in proceeding with the deal with Reliance.
Delhi High Court asked to maintain status quo on deal with Reliance
The Delhi High Court has asked Future Retail to maintain the status quo until a final decision is reached on the deal with Reliance Industries. The order has been given by the High Court due to opposition from giant e-commerce company Amazon. Last week, the High Court said that an interim order was needed to protect the interests of Amazon.
Future Retail-Reliance deal was signed in August
Reliance Industries Limited (RIL) had announced the purchase of Kishore Biyani’s Future Group in August. The deal was done for Rs 24,713 crore. Under the deal, Future Group’s retail, wholesale, logistics and warehousing business will go to Reliance. Reliance Retail Ventures Ltd and Reliance Retail & Fashion Lifestyle Ltd have bought these businesses of Future Group. Reliance had signed the deal to expand the retail business in the country.