MUMBAI, Oct 10 (Reuters) - Shares of India's Polaris Financial Technology Ltd slumped on Wednesday after the country's market regulator accused the software services firm's chief executive of insider trading and barred him from participating in the securities markets for two years.
The Securities and Exchange Board of India (SEBI) said late on Tuesday it has barred Polaris CEO Arun Jain from buying, selling or dealing in securities either directly or indirectly.
Jain denied the accusation of insider trading when contacted by Reuters and said he would appeal against the regulator's order with the Securities Tribunal.
In its report, SEBI accused Polaris, formerly called Polaris Software Lab Ltd, of "deliberately" withholding in September 2000 a price-sensitive decision to call off a planned acquisition of U.S. software solutions and services provider Data Inc.
SEBI further accused Jain of selling shares in Polaris through a separate company he controlled after the decision had been made but before the announcement was disclosed to the exchanges.
Polaris shares were down 7.1 percent as of 0446 GMT after earlier falling as much 8.6 percent. The broader market was down 0.46 percent. (Reporting by Rafael Nam and Harichandan Arakali; Editing by Muralikumar Anantharaman)