IndusInd Bank shares fall 3% after fresh whistleblower complaint reaches PMO, RBI

Shares of IndusInd Bank dropped over 3% on Wednesday after a fresh whistleblower complaint was sent to the Prime Minister’s Office and several regulators, including the Reserve Bank of India (RBI), seeking an investigation into alleged insider trading, governance failures, and shortcomings in forensic and audit reviews at the private lender.

The complaint, a copy of which was seen by The Economic Times, was also sent to the Serious Fraud Investigation Office (SFIO), National Financial Reporting Authority (NFRA) and other agencies. The shares of the private lender tumbled to Rs 884.05 apiece on Wednesday morning after the report.

The whistleblower alleged insider trading by Samir Agarwal, former zonal head of eastern India at IndusInd Bank, along with manipulation of financial records, evergreening of microfinance loans, suppression of audit findings, and attempts by senior management and board members to conceal irregularities. It was alleged that Agarwal generated gains of around Rs 46 crore via share transactions worth nearly Rs 815 crore by family members and related entities using confidential information just before key developments became public.

IndusInd Bank rejects whistleblower’s claims

Responding to The Economic Times’ queries, IndusInd Bank said that it “rejects the assertions” made by the whistleblower, adding that all concerns have been “duly examined” and “appropriate actions” taken in line with internal policies and regulatory requirements. It said it had proactively reported certain matters to authorities and, with the matter under review, it would not comment further.

This comes after the bank last year disclosed issues related to the accounting of internal derivative trades, sending the stock to a tailspin and resulting in several managerial exits including then CEO Sumant Kathpalia.

IndusInd Bank share price

IndusInd Bank shares have fallen around 5% in one week and more than 3% in one week. The stock has gained around 11% in one month, but declined over 31% in three years and 12% in five years.

The private bank currently has a market capitalisation of nearly Rs 68,947 crore. The stock’s P/E ratio stands at around 80x.

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