Shares of the Adar Poonawalla-backed non-banking finance company (NBFC) – Poonawalla Fincorp – were locked in a 5 per cent lower circuit at Rs 163.55 for second straight session after it informed exchanges that its managing director Abhay Bhutada resigned from the board of the company with immediate effect from September 16. Abhay Bhutada ceases to be a Director and Key Managerial Personnel of the Company, Poonawalla Fincorp said in an exchange filing.
Abhay Bhutada’s resignation came after the market regulator Securities Exchange Board of India (SEBI) banned him and seven others from the securities market for insider trading.
Managing Director Abhay Bhutada was found guilty of sharing information about Adar Poonawalla-owned Rising Sun Holdings’ proposed stake buy in the company before it was public knowledge, the Securities and Exchange Board of India (SEBI) said in an interim order on Wednesday.
Rising Sun Holdings had acquired a majority stake in Poonawalla Fincorp, formerly called Magma Fincorp, earlier this year. At the time Bhutada was the chief executive officer of Poonawalla Finance, a private subsidiary of Rising Sun Holdings. Based on call records, financial dealings and bank statements, SEBI discovered that several entities related to Mr Bhutada traded in Magma stocks before details of Rising Sun’s acquisition were disclosed to the stock exchanges.
Magma Fincorp said it had received shareholder approval for Rising Sun Holdings’ acquisition of a majority stake in the company via preferential issue of up to Rs 3,456 crore.
As of 11:30 am, there were over 9 lakh pending sell orders for Poonawalla Fincorp shares with no buy orders, according to data on the BSE.