WhatsApp Leak Case: SEBI Directs Axis Bank to Conduct Internal Probe

collected by :Molly Tony

Mumbai: The Securities and interchange Board of India (SEBI) on Thursday pulled up Axis Bank for the alleged leak of its June-quarter earnings on media platform WhatsApp. SEBI directed the bank to conduct an internal explore into the leak and submit its findings within 3 months. The issue of earnings leak on private whatsapp apps groups was premier announced in an investigative report with break news agency Reuters. The market regulator is told to be examining 4 further companies apart from Axis Bank. SEBI had asked Axis Bank to submit data regarding the process and controls it follows for treating price-sensitive information.

Markets Regulator Asks Axis Bank To explore Results Leak On WhatsApp

In its premier order in the whatsapp apps leak case, regulator Sebi on Wednesday ordered Axis Bank to strengthen its systems and conduct an internal explore to mend responsibility as the premier probe showed the leakage because of "inadequacy" of processes at the bank.Axis Bank has to full the inquiry within 3 months and file a report to Sebi within 7 days thereafter, the regulator said, after it found that the company's results for the April-June 2017 quarter were "either identical or matched closely with the figures" that were in circulation on whatsapp apps prior to an formal announcement.Sebi began a explore final 30 days after a media report surfaced with respect to circulation of Unpublished value Sensitive data (UPSI) in various private whatsapp apps groups about certain companies, involving Axis Bank, ahead of their formal announcements.The regulator too conducted search and seizure operations in this regard at various places, involving on the premises of various market entities.This is the premier order from Sebi in this status and several others may follow soon.During the preliminary examination, it was observed that the messages circulated in whatsapp apps groups nearly matched the quarterly financial results of Axis Bank for the June quarter, that were published subsequently. The results were formally reported on July 25 at 1623 hours however the message was in circulation on July 25, 2017 since 0912 hours. "It was observed that the figures that were in circulation in whatsapp apps groups about Axis Bank were either matching in totality or were lock to the actual announcements except figures for slippage," Sebi said.The regulator subsequently sought data from Axis Bank and asked it to submit data regarding the processes and controls it has in place regarding unite states handling.In response, Axis Bank submitted that it has ensured adherence to the applicable laws and adopted adequate processes and controls to maintain confidentiality of value sensitive data relating to the bank.It too submitted that access or communication of such data is made or done on a want to realize basis. It too provided particulars of the processes and controls in that regard.Axis Bank too provided the chronology of events relating to preparation and finalisation of its financials relating to the quarter -- submitting that the process started from July 1, 2017 and the financial results were formally discovered on July 25, 2017.Since July 1, various rounds of meetings and discussions were conducted between the officials and auditors of Axis bank in the process of finalisation of quarterly results.Thereafter, during July 21-24, 2017, there was finalisation of board notes and presentations, press release, earnings presentation and analyst dial transcript.Finally, the results were formally declared on July 25, 2017 at 1623 hours. "Thus, it prima facie appears that the financial results of Axis Bank for quarter ended June 2017 were finalised with July 24, 2017, that was before circulation of whatsapp apps message on July 25, 2017," Sebi said.The regulator told at this stage, the source or origin of the leakage of unite states cannot be ascertained, however it could prima facie be inferred on the Fundamental of the realities and circumstances that the unite states relating to financials of Axis Bank was leaked.

WhatsApp leaks: Sebi orders Axis Bank to explore results leak, beef up systems

as informed in The Securities and interchange Board of India ( SEBI ) has asked Axis Bank , India's fourth-biggest private-sector lender with market capitalization, to strengthen its internal processes and systems after the regulator noticed leakage of price-sensitive information relating to financial results on whatsapp apps groups before they were formally reported on stock exchanges.The regulator on Wednesday asked Axis Bank to conduct an internal inquiry on those included in the preparation of board notes and presentations, with information access and engaged in the consolidation of figures and dissemination of information relating to financial results in the public domain.SEBI has too sought an inquiry on all the members of committees included in generation of the original information for the purpose of determining key ratios, such as Gross non-performing assets (GNPA), internet non performing assets (NNPA), internet interest margin (NIM), slippages, write-offs, and current account and savings accounts (CASA).The regulator has directed the bank to full its inquiry within a period of 3 months from the date of the order and submit its report.Axis Bank is 1 of the twelve companies whose financial results were leaked on whatsapp apps groups before they were formally announced.SEBI told its preliminary examination showed that the messages circulated in whatsapp apps groups nearly matched the quarterly financial results of Axis Bank for June 2017, that were published subsequently.The regulator told that such resemblance of the information circulated in the whatsapp apps groups to the actual financial results prime facie indicates that the figures for Axis Bank were in circulation prior to the formal announcement. "The same can not have been possible without leakage of information from the persons privy to the information relating to the financials prior to the formal announcement," G. Mahalingam, whole-time member of SEBI, told in his order.The regulator told that at this stage, the source and origin of the leakage of unpublished price-sensitive information cannot be ascertained. "Such leakage is prima facie attributable to the inadequacy of the processes/controls and systems that Axis Bank as a listed firm had put in place," SEBI said.Last month, Reuters had reported that the financial results of some of the main Indian companies, involving Dr Reddy's, were circulated in whatsapp apps groups of traders just before the companies formally declared the results.Other companies whose financial results were allegedly leaked involve Cipla, HDFC Bank, Tata Steel, Wipro, Bajaj Finance, Mahindra Holidays and Resorts, and Crompton Greaves user Electricals.Last Friday, SEBI conducted a 'search and seizure' operation with the help of Mumbai police on 34 individuals, who are dealers and study analysts with various leading broking firms.