Mumbai: The Securities and Exchange Board of India (Sebi) is looking into a plunge in shares of InterGlobe Aviation Ltd just before the company announced the departure of its top executive Aditya Ghosh, two people aware of the matter said. The market regulator is also checking if InterGlobe, which flies India’s largest airline IndiGo, disclosed the resignation news in time, and if there are any violations of insider trading rules, these people said on condition of anonymity.
Ghosh stepped down as InterGlobe’s whole-time director with effect from 26 April, however, the news was disclosed to stock exchanges only on the evening of 27 April, a full 24-hours later. Earlier that day, shares of InterGlobe fell as much as 6.1%.
“Sebi is particularly looking at the 24 hours’ delay in informing the stock exchanges of Mr. Ghosh’s resignation and the reason behind delaying the disclosures,” the first of the two people quoted earlier said.
According to the Securities and Exchange Board of India’s Listing Obligation and Disclosure Requirement (LODR) rules, all price-sensitive information including change in management /top personnel changes must be disclosed to stock exchanges immediately.
The second of the two peole cited above said the market regulator also wants to know who all knew of Ghosh’s resignation before the exchanges were informed.
“This information becomes all the more important in the wake of stock movements which was trading at least 6% lower. Trading pattern will need to be scrutinised. Sebi has already asked exchanges to collate the share price data to examine any possible breach of the insider trading rules. Resignation of key managerial personnel (KMP) is a price-sensitive information and needs to be disclosed to stock exchanges in a timely manner,” the second person added.
Ghosh, who continues to hold the position of president, will leave the company on 31 July.
The airline’s promoter Rahul Bhatia will assume charge as interim chief executive officer (CEO) till the company finds a new president and CEO.
An email sent to Sebi was not answered.
In an emailed response, the company said it has not received any query from the market regulator.
“In any event, please note that IndiGo has complied with all stock exchange listing requirements relating to the announcement of Mr. Aditya Ghosh’s resignation as President and Whole-Time Director of IndiGo,” said a spokesperson for IndiGo.
“It can be termed as violation of the listing regulation, if there is a delay in informing the resignation to stock exchange. It is equally critical, considering the fact that the stock is part of BSE 200 and Nifty 500,” a lawyer advising companies on securities law said on condition of anonymity.
“This is a potential violation and Sebi definitely can ask them the reasons. Technically, a delay is a delay,” said another securities lawyer who regularly represents companies at the Securities and Appellate Tribunal. He too did not wish to be named.
Rhik Kundu in Mumbai contributed to this story.