Abstract: Recently Babar and Belle collaborations have measured direct CP asymmetry $A_{CP}=-0.114\pm 0.020$ in $\bar B^0 \to K^- \pi^+$. The experimental value is substantially different from QCD factorization prediction. We show that SUSY flavor changing neutral current interaction via gluonic dipole can explain the difference. CP asymmetries in other $B\to K\pi$ decays are predicted to be sizeable. Taking this asymmetry as a constraint, we find that the allowed SUSY parameter space is considerably reduced compared with constraint from $B\to X_s \gamma$ alone. We also find that the allowed time dependent CP asymmetries $S_f$ in $\bar B^0 \to \bar K^{* 0}\gamma \to \pi^0 K_S \gamma$ and $\bar B^0\to \phi K_S$ to be large. These predictions are quite different than those predicted in the Standard Model and can be tested in the near future.