SEBI said Biyani and his brother traded in shares of FRL through a group company on the basis of unpublished price sensitive information before a demerger of certain businesses of Future Retail that pushed its share price higher.
A spokesman the two Biyani brothers did not immediately respond to a request for comment.
Besides, SEBI also imposed a penalty of Rs 1 crore on Kishore Biyani, to be paid within 45 days from the receipt of order. Another senior lawyer, speaking on condition of anonymity, said that the order won't impact the NCLT process. "However, wrongful gains made are being directed to be disgorged by this order", said the order by Ananta Barua, wholetime member of SEBI. Future Retail said in a statement that the sanction by the securities regulator against its founder won't affect its plan to sell retail assets to Reliance Industries Ltd.
SEBI in its order has also asked Future Corporate Resources, Kishore Biyani and Anil Biyani to jointly and severally disgorge an amount of over Rs 17.78 crore along with an interest at the rate of 12 per cent per annum from April 20, 2020 till the date of actual payment. These lawyers added that Biyani could challenge the Sebi order at the Securities Appellate Tribunal (SAT) and eventually it might land in the Supreme Court. This deal has been challenged by e-commerce giant Amazon in courts.
"On the face of it, it won't become more hard for group companies to raise money", said J.N. Gupta, managing director at Stakeholders Empowerment Services, a proxy adviser.
Amazon had dragged Future Group to arbitration at Singapore International Arbitration Centre (SIAC) in October past year, arguing that Future violated the contract by entering into the deal with rival Reliance. Among other group companies, Future Supply Chain fell 5 per cent to Rs 95.15, Future Consumer tumbled 3.9 per cent to Rs 7.89 and Future Enterprises hit 11.15, also down 5 per cent. An Indian court on Tuesday temporarily restrained Future Retail from disposing of the assets after objections from Amazon.
Future Retail is embroiled in a battle with Amazon.com Inc. over that deal, which the US online retail giant is trying to block.
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