The company’s board has accepted his resignation, the company said in a statement to the exchanges, adding that Bhutada will step down with immediate effect. Group CEO Vijay Deshwal is likely to continue with the company’s operations. SEBI said in its order on Wednesday
SEBI said that its surveillance alert system had detected suspicious trading patterns in Magma Fincorp shares around the announcement of acquisition of Magma Fincorp by Rising Sun Holding Private Limited (RSHPL), a Poonawalla Group-controlled company on February 10, 2021.
Upon analysis of the warnings for the announcement, a group of affiliated entities were found to be taking long positions in the shares. Thereafter, these entities had paid off the long positions which generated substantial profits. The regulator said Bhutada was the contact person for the deal from the very beginning of the discussions and has been involved in the matter throughout the UPSI (Unpublished Price Sensitive Information) period.
Based on the call data records and bank statement analysis, SEBI’s investigation has revealed that abhay bhootada The inside information was passed on to its affiliated organizations – Abhijit Pawar, Saumil Shah and Rakesh Bhojgarhia, who passed on this information to Amit Agarwal.
Besides Bhutada, seven people have been barred from doing business and their bank accounts have been seized to the extent of Rs 13.58 crore. Earlier in the day, in a notice to the stock exchanges, Poonawalla Fincorp had said that Bhutada has denied the allegations.
“With respect to the above subject, I wish to clarify as follows. 1. I refute all the allegations mentioned against me in the order. 2. I have disclosed any Unpublished Price Sensitive Information (UPSI) directly or indirectly to the mentioned entities Order except in official discussion with Entity No. 2, who was acting as consultant for the acquisition transaction. 3. I do not derive any financial benefit, directly or indirectly, from the entities mentioned in the Order 4. My transactions with the entities are genuine business transactions mentioned in the order and are valid in nature including certain past transactions,” Bhutada said in a letter addressed to the board of directors.
He also said that he would take appropriate legal recourse.
Shares of Poonawalla fell 5% on Thursday to Rs 172 a piece as investors sold shares of the company following the Sebi order on Wednesday night. Bhutada had set an ambitious target to triple the company’s debt assets over the next four years.