SEBI Asks Axis Bank To Probe WhatsApp Earnings Leak
SEBI said Axis Bank’s earnings were almost identical to the numbers circulated on Whatsapp ahead of the results.
Markets regulator SEBI has asked private lender Axis Bank Ltd. to conduct an internal investigation into financial earnings that were allegedly leaked on the Whatsapp messaging platform ahead of the earnings being disclosed to the stock exchanges and shareholders.
During its preliminary examination, the Securities and Exchange Board of India said in its statement that financial results of Axis Bank for the June-ended quarter were “almost identical” to the information that was circulated on private WhatsApp groups. According to its probe, Axis Bank’s financial results were finalised between July 21-24, while messages were circulated on Whatsapp on July 25.
“As per media report, the message was in circulation on July 25, 2017 since 9:12 am,” SEBI said in its order. “The actual results of Axis Bank were announced at stock exchanges on July 25, 2017 at 16:23 hours (4.23 pm).”
Such resemblance of the information circulated in the WhatsApp groups with the actual financial results prima facie indicates that the financial figures of Axis Bank were in circulation prior to official announcement/publication by Axis Bank. The same could not have been possible without leakage of information from the persons, who were privy to the information relating to financials prior to its official announcement.SEBI Order
Axis Bank in an emailed statement said it has been working closely with SEBI during the course of the preliminary examination. “The Bank will work with SEBI and the best experts in the field to investigate the matter and will take action as appropriate,” Rajesh Dahiya, executive director-corporate centre at Axis Bank said.
The lender is the first company the regulator has named in its probe related to the earnings leaked on Whatsapp. A Reuters investigation had uncovered earnings leaks ahead of financial results on the instant messaging app and had identified at least 12 cases.
SEBI regulations bar any insider with “unpublished price-sensitive” information of a company or listed securities from communicating or providing it to any other person, including other insiders. Such information, according to the SEBI (Prohibition of Insider Trading) Regulations, 2015, cannot be shared unless in the case of a legal obligation or if it disclosed in order to perform duties. SEBI chairman Ajay Tyagi had said that there were six or seven blue-chip companies whose earnings were circulated on WhatsApp closer to the actual results.
Last week, the regulator conducted searches on the premises of more than 30 market analysts and dealers, seizing documents, computers, mobiles and laptops.
SEBI has asked Axis Bank to “strengthen its processes, systems, controls” to ensure that such leaks don’t recur in the future. It also directed the lender to conduct an internal inquiry into the matter, taking action against those responsible.
The inquiry directed by SEBI has to be completed within three months following which Axis Bank will submit a report to the regulator.