Gadgets Get Banned After WhatsApp Leak At Audit Meetings

Firms named by Sebi, the market regulator, in the case of WhatsApp leak have gone for a refurbishment of their interior mechanisms, claimed an exclusive media report last week.

As per the report, the firm going forward will not permit gadgets and mobile phones during review meetings. In addition, such review committee meetings will be conducted in a restraining environment to prevent leakage. The CFO and CEO of the firm will be accountable to make sure restricted access of outcomes to the inner team.

Apart from this, real-time revelation will be made wherever feasible, before the quarterly outcomes.

In December 2017, Sebi held searches at locations of over 30 market dealers and analysts. This followed a search into the flow of unpublished price sensitive data associated to different listed firms, comprising some blue chips, via social media chatrooms and WhatsApp messages.

The examination began following a media report that recommended that profits of some major Indian firms, comprising Dr Reddy’s, circulated on traders’ WhatsApp groups even before the figures were formally out.

The leaks also pertained to the profits of HDFC Bank, Cipla, Wipro, Tata Steel, Mahindra Holidays and Resorts, Bajaj Finance, and Crompton Greaves Consumer Electricals.

In December last year, the market watchdog had requested Axis Bank (the private lender) to strengthen its internal systems and processes after the regulator observed leakage of price-sensitive data on WhatsApp groups related to financial results prior to they were formally declared on stock exchanges.

On a similar note, with a goal to improve cyber security, Sebi is seeking to issue a new bunch of rules, wherein eye-scan or fingerprint will be needed for stock trading via mobile apps. The watchdog has asked for opinions from the market players such as traders, brokers, and stock exchanges regarding this. A final decision will be put in place after considering opinions of all the stakeholders, claimed regulatory sources.