Looking into ‘egregious violations’ by IndusInd officials, says Sebi chief

Swift cleanup by interim management a new dawn: Hinduja

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• The “swift” clean-up by the interim management of IndusInd Bank would help rebuild trust in the private sector lender, Ashok Hinduja, chairman of promoter grouping IIHL, said on Thursday

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• Hinduja also affirmed IIHL’s commitment to support the bank with further capital, if required

Sebi Chairman Tuhin Kanta Pandey on Thursday said the market regulator was looking into any “egregious violations” by senior management of IndusInd Bank, hit hard by accounting frauds, which according to estimates involve a staggering about Rs 3,400 crore.

Pandey said the issues at IndusInd Bank would be dealt with by the Reserve Bank of India (RBI), but Sebi was also looking at securities market violations by officials of the crisis-hit bank.

“The RBI is looking into whatever Sebi has to do in relation to...whatever Sebi’s remit is...Sebi is doing... If there are any egregious violations by anyone in their capacity, Sebi is looking into it,” Pandey told reporters on the sidelines of an event organised by industry body Assocham.

On Wednesday, IndusInd Bank’s board said it suspected involvement of certain employees in the fraud and directed the management to report the matter to investigative agencies and regulatory authorities.

Fraud in the derivatives and microfinance portfolio as well as balance sheet disclosures have rattled the private sector bank. The bank, which has seen top-level resignations, has ordered an internal audit review and is undergoing a forensics probe.

The internal audit report of the bank revealed “involvement of senior bank officials, including former Key Management Personnel (KMP), in overriding key internal controls”.