(This story originally appeared in on Sep 21, 2021)Mumbai: Days after managing director Abhay Bhutada quit following the Sebi action on insider trading in erstwhile shares, advisory and consulting major KPMG India on Monday terminated the services of one of its partners, Saumil Shah. The move came after Shah was named in the Sebi investigation into the insider trading at Magma, now renamed Poonawalla Fincorp after it was taken over. Chairman Adar Poonawalla has said that the company is carrying out an independent investigation too into the recent events that led to the exit of Bhutada.
The markets regulator’s probe had showed that, in February this year, eight people — led by Bhutada — together made a profit of about Rs 13.5 crore by trading in the shares of Magma Fincorp during its acquisition by Poonawalla Group. At that time, Shah, named in the investigation report, was with another firm that advised Poonawalla Group in this acquisition.
Replying to TOI’s queries, a spokesperson for KPMG said that the firm takes independence and non-compliance with its policies and regulations extremely seriously. “The individual concerned was not a partner in KPMG during the period that he undertook these transactions in February, 2021 and (it) had no knowledge of these violations until the Sebi report was published,” the spokesperson said. “He had joined the firm in May 2021 and has been separated from the firm since the incident came to our knowledge. (KPMG) remains committed to ensuring full compliance with all applicable laws and regulations and conduct by (its) people that is fully aligned to KPMG’s values.”
The Sebi report was made public on September 15. The next day, the NBFC’s managing director Bhutada resigned, after initially denying all the charges. Sebi had barred Bhutada, Shah and six other connected entities from the market for insider trading. Its initial investigations had showed that these entities together used illegal means and profited by about Rs 13.5 crore through the trades. Sebi had also ordered impounding of the bank accounts of these eight entities. In an investor call held on Saturday (September 18), Adar Poonawalla said Bhutada will also be cleared of what he’s done, because he hasn’t done anything, according to the lawyers and others (who have given him the reports). He further added that Bhutada has stepped down according to corporate governance standards. He further said, “We have a strong leadership team available through a healthy mix of the new and old team and are well-positioned to continue according to the business plan.”