Poonawalla Fincorp MD Abhay Bhutada quits following Sebi action

Vijay Deshwal, Group Chief Executive Officer, will continue to run the company's operations; firm appoints new Chief Risk Officer

Abhay Bhutada, managing director of Poonawalla Fincorp Ltd (PFL) has resigned from post after the Securities and Exchange Board of India (Sebi) barred him from accessing the securities market for allegedly insider trading in shares of PFL.

Vijay Deshwal, Group Chief Executive Officer, will continue to run the operations of the company, PFL said in a statement.

Meanwhile the finance company also moved its chief risk officer (CRO) Girish Poddar to credit monitoring role in the organization and appointed Sharad Pareek as new CRO for a five year term.

Bhutada decided to step down as the Managing Director's post in the broader interest of the Company and its stakeholders, PFL informed BSE. PFL stock closed five per cent lower at 172.15 per share on BSE.

Besides Bhutada, SEBI barrsed seven others from accessing the securities market for allegedly insider trading in shares of PFL - formerly known as Magma Fincorp. The regulator also impounded ill-gotten gains of Rs 13.6 crore.

The market regulator in its order said Sebi’s surveillance alert system detected suspicious trading patterns in the shares of Magma Fincorp ahead of the acquisition of a controlling stake by Adar Poonawalla-led Rising Sun Holding (RSHPL) in February 2021.

An analysis done by Sebi showed that a group of connected entities had taken long positions in Magma and later squared off their positions, generating substantial profits.

After Magma made a preferential allotment of Rs 3,456 crore to the Poonawalla Group, its scrip hit upper circuit for seven straight trading sessions.