Summary of this article
IndusInd Bank shares fell 3 per cent after whistleblower complaint
Allegations include insider trading and governance lapses; complaint sent to PMO, RBI, and others
Claims cite large related-party trades and alleged gains over Rs 53 crore.
Bank denies allegations; stock already under pressure after Rs 2,000-crore derivatives discrepancy issue
Shares of IndusInd Bank fell 3 per cent on June 3 after a fresh whistleblower complaint sought an investigation into alleged insider trading, governance failures, and gaps in forensic and audit reviews at the lender. The complaint has been sent to the Prime Minister’s Office and multiple regulators, including the Reserve Bank of India (RBI), according to an Economic Times (ET) report.
The development has further deepened scrutiny of the lender, which is already under pressure following the discovery of a Rs 2,000-crore derivatives accounting discrepancy.
Following the report, IndusInd Bank's shares fell as much as 3.12 per cent to an intra-day low of Rs 884.05 apiece on the National Stock Exchange (NSE). The bank has yielded near-flat returns on a year-to-date (YTD) basis. The stock is still trading below its pre-derivatives discrepancy debacle level, even after recovering considerably over a year.
IndusInd Bank Insider Trading Allegations
The complaint, according to the report, alleges insider trading by Samir Agarwal, former eastern India zonal head at IndusInd Bank. It also raises concerns over manipulation of financial records, evergreening of microfinance loans, hiding audit findings, and efforts by senior management and board members to cover up irregularities.
Agarwal is accused of making gains of around Rs 46 crore through share trades worth nearly Rs 815 crore before sensitive information became public. The complaint says he used confidential information from his banking role to help family members and related entities trade in stocks.
Overall, family-linked transactions are said to total about Rs 816 crore, with gains of over Rs 53 crore, largely involving companies linked to his loan portfolio. In one case, his wife reportedly bought more than 3.40 million shares of Kesoram Industries before a key development, which earned her about Rs 3.26 crore.
IndusInd Bank Rejects Whistleblower Complaints
Taking cognisance of the matter, stock exchanges have sought clarification from the bank, but its response is still awaited.
The bank, however, responding to queries cited by ET, said it “rejects the assertions” made in the whistleblower complaint. The bank added that all concerns have already been “duly examined” and that “appropriate actions” have been taken in accordance with internal policies and regulatory requirements. It also said some matters were proactively reported to regulators, and since the review is ongoing, it will not make further comments.
According to the report, the whistleblower complaint was sent to the bank at the end of May this year.
