In its June 6, 2025, corrigendum, Sebi explained that the term “board note” will now be read as “engagement note (signed by the CFO and two senior executives)” in the interim order issued in late May.
The regulator had initially stated that KPMG’s appointment to review the derivative issues was based on a board note. The corrigendum clarifies that it was actually based on an engagement note — a document typically signed by top company officials but not necessarily a formal board-level communication.
The insider trading case revolves around allegations that these executives sold shares of IndusInd Bank while in possession of unpublished price-sensitive information (UPSI) regarding significant derivative losses at the bank.
According to Sebi’s order, IndusInd Bank’s internal review had identified a negative financial impact of Rs 1,572 crore — approximately 2.35% of its net worth. However, this information was not disclosed to the public until March 10, 2025.
Sebi’s investigation revealed that Kathpalia and Khurana sold shares — 1.25 lakh and 3.48 lakh, respectively — before the public announcement. By doing so, they avoided losses estimated at nearly Rs 20 crore.Sebi has frozen their bank and demat accounts to the extent of the gains and barred them from trading in securities until further notice.
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