Sebi rapped Axis Bank in the case of circulation of unpublished price sensitive information on WhatsApp recently. Sebi had taken stern notice of this fact when it was brought to public notice by a media report, which stated that UPSI about certain listed companies including Axis Bank had surfaced before the official announcement of their quarterly results.
After the board meeting got over, Sebi Chairman, Ajay Tyagi addressed a press conference and warned that all those involved for this occurrence; auditors included would not be spared and strict action would be taken against them. He further added that the insider trading norms would be toughened if needed.
Tyagi said that it was clear from the initial investigations that the companies themselves were responsible for the leakage of information and Axis Bank was one of them. The Bank was told by the regulator to make its systems fool-proof and pinpoint the concerned individuals responsible for the leakage after conducting an internal probe into it. The leakage from this end occurred because of the ‘inadequacy’ of the bank’s processes. The time frame for completion of inquiry given to Axis Bank was three months and thereafter a report had to be filed by the bank within seven days to Sebi.
A search and seizure operation was also conducted by Sebi at premises of several market entities at various places.
Axis Bank received the directive from Sebi after initial investigations revealed that the April-June 2017 quarter financial results closely matched with figures circulated on WhatsApp before the official announcement. The official announcement of results took place at 1623 hours on July 25 while the figures on WhatsApp came out at 0912 hours on July 25, 2017. Axis Bank has agreed that it will focus its efforts in ascertaining causes of the leak and undertake required action.
Tyagi said that besides Axis Bank, other companies were also involved the names of which would be disclosed soon and necessary actions taken.