3 min readMumbaiMay 8, 2025 10:36 PM IST
First published on: May 8, 2025 at 10:36 PM IST
Two former officials of IndusInd Bank were allegedly involved in insider trading during a period when the bank faced accounting lapses in its derivative portfolio, says an audit report by Grant Thornton.
On April 29, weeks after IndusInd Bank disclosed accounting lapses and losses of nearly Rs 2,000 crore in its derivatives portfolio that triggered a rout in its shares, the bank’s Managing Director & CEO Sumant Kathpalia resigned with immediate effect. IndusInd Bank had earlier announced the resignation of deputy CEO Arun Khurana.
“Grant Thornton, which the bank hired to conduct an independent forensic investigation, found as a result of its review of internal accounts and communications that there were indications Kathpalia and Khurana traded in shares of IndusInd “during a period of seeming non-disclosure,” wire agency Reuters reported on Thursday, quoting a summary of the findings.
“Considering that employees had knowledge of incorrect accounting and/or its impact but traded in shares of IBL during the period may also require a determination from an insider trading perspective,” it said.
Kathpalia and Khurana sold shares worth Rs 157 crore in 2023 and 2024, according to data from the Bombay Stock Exchange (BSE). The data reveals that Kathpalia sold approximately 950,000 shares, valued at Rs 134 crore, between May 24, 2023, and June 25, 2024. During the same period, he purchased 396,000 shares worth Rs 34 crore. Similarly, Khurana sold 550,000 shares for Rs 82 crore over 2023-24, while acquiring 238,000 shares worth Rs 25 crore.
Earlier, there were reports in a section of the media that market regulator Sebi did not find insider trading by the two officials, saying all disclosures were in place and there was no wrongdoing.
When contacted, Sebi officials did not comment on the issue.
IndusInd Bank also did not respond to mails from The Indian Express.
“I undertake moral responsibility, given the various acts of commission/ omission that have been brought to my notice. I would request that my resignation be taken on record at close of working hours today,” Kathpalia said in his resignation letter to the bank’s board.
While the bank initially sought to shift the blame to the Reserve Bank of India’s change in rules relating to the derivative portfolio and the loss from the derivative book remained unresolved for a long time, leading to the accumulation of losses, subsequent inspection by the central bank and external auditing firms found that the top brass did not act on time to limit the losses and clean up the mess.
On March 11, 2025, when the bank revealed a potential 2.35 per cent adverse impact on its net worth after an internal review of its derivative portfolio, the lender’s shares crashed by 27 per cent on the stock exchanges. The stock closed Rs 244 down at Rs 655.95 on the BSE on that day. Its share closed at Rs 825.35 on the BSE on Thursday.
IndusInd Bank also did not respond to mails from The Indian Express. 
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