SEBI Asks HDFC Bank To Probe WhatsApp Earnings Leak

SEBI asked HDFC Bank to strengthen its controls to ensure price-sensitive information is not leaked

Image of WhatsApp logo for representational purposes only.

(Photo: iStock)

The market regulator, probing earnings circulated on messaging platform WhatsApp before official announcement, asked HDFC Bank Limited to strengthen its controls to ensure price-sensitive information is not leaked.

Such leakage is prima facie attributable to the inadequacy of the processes, controls and systems that HDFC Bank as a listed company had put in place, the Securities and Exchange Board of India said in an order uploaded on its website

The regulator asked India’s largest private bank to complete an internal investigation in three months to find out people responsible for leaking the numbers and take appropriate action against in accordance with law.

It found that the leaked numbers for the quarters ended December 2015 and June 2017 were close to the actual results.

(Photo Courtesy: BloombergQuint)

...Financials including NPA figures pertaining to the quarterly results of HDFC Bank matched closely with the figures that were in circulation prior to its official announcement by HDFC Bank.

SEBI order

SEBI had earlier asked private lender Axis Bank Limited. to conduct a similar internal investigation. The action followed after it sought details from about seven companies during its probe after a Reuters investigation uncovered earnings leaked via WhatsApp ahead of quarterly reporting.

SEBI conducted searches at premises of more than 30 market analysts and dealers, seizing documents, computers, mobiles and laptops.

SEBI Chairman Ajay Tyagi had said on 11 December that the regulator was serious about the matter and can’t, “sit quietly on it.”

(This story was originally published on BloombergQuint and has been republished with permission.)

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