The official, who is no longer with the bank, dealt with several corporate clients of IBL as part of regular business, and gained knowledge of the transaction during meetings at Kesoram, which was a client.
This came to light after an internal investigation carried out by the private bank, a person familiar with the development said. The probe also revealed that the official’s wife had bought Kesoram shares worth over ₹38 crore and made gains of ₹3.26 crore.
The official’s portfolio gains from such insider trading was, however, not confined to Kesoram shares. Through his ‘dependent family members’, he had acquired shares of some of the other listed companies who were borrowers of IBL. Such trades raked in profits of more than ₹32 crore, the probe found.
He also shared the information with some of his senior colleagues.
AgenciesOn November 6, 2023, he sent an email to seniors colleagues, informing them that after a meeting with Kesoram officials, he had come to know that the investment bank JM Financial had been hired as an advisor for selling the company to a strategic player. The buyer was probably Ultratech, he indicated in the email.Later that month, the board of directors of UltraTech met on November 30, 2023 to approve a composite scheme of arrangement between Kesoram, UltraTech, and their respective shareholders and creditors.The official concerned had also taken positions in equity derivatives of IBL in 2021.
Bankers are often in possession of classified information (‘unpublished, price-sensitive information’ in regulatory parlance) about corporate clients, thereby bringing them under the wider definition of insiders.
According to the Securities & Exchange Board of India (Prohibition of Insider Trading) Regulations, listed companies, intermediaries, and every person required to handle unpublished price sensitive information in the course of business operations, must have a code to regulate, monitor, and report trading by its ‘designated persons’ and their ‘immediate relatives’. The regulation categorises the particular official as a designated person.
In fact, in the course of the investigation, there has been correspondence between the bank’s company secretary and a member of the board’s audit committee, on the issue of ‘connected persons’ and ‘insiders’ in this context.
When asked to comment on these trades and whether the bank had acted against any other official who received the information on the Kesoram deal, an IBL spokesperson said: “The Bank investigates insider trading allegations and takes the appropriate actions based on the Bank’s internal policies. In this regard, the Bank has made, and will continue to make, disclosures as required under law. Further, we refer to the ex-parte interim order issued by Sebi on 28 May 2025 (the “interim order”) which stated amongst others that a detailed examination by Sebi with respect to insider trading (against various suspects) is already underway. Accordingly, since the regulator is investigating these matters, it would not be appropriate for the Bank to respond to these queries or reports.”
IBL, which now has a new CEO, suffered a jolt after it surfaced that the bank had been masking foreign currency derivative losses and inflating profits over several years through sharp accounting practices.
A few senior officials of IBL, who were aware of how accounts were handled and sold shares before story came to light, had left on a low note following insider trading allegations.
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