Infosys settles insider trading charges with SEBI, pays ₹25L fine
What's the story
Infosys, India's second-largest IT services company, has settled insider trading charges with the Securities and Exchange Board of India (SEBI), according to Reuters. The company's CEO, Salil Parekh, agreed to pay a fine of ₹25 lakh (approximately $30,000) for not having sufficient controls to prevent insider trading. The case involved several entities and individuals from Infosys including Pranshu Bhutra, Amit Bhutra, and Bharath C. Jain among others.
Allegations background
Insider trading linked to Infosys-Vanguard partnership
The insider trading allegations were connected to Infosys's strategic partnership with Vanguard in 2020. SEBI's investigation revealed that Infosys had recognized the strategic importance of this partnership for its business expansion and revenue growth. The information regarding the partnership was considered Unpublished Price Sensitive Information (UPSI) under the Prohibition of Insider Trading (PIT) Regulations 2015.
Alleged violations
Infosys officials accused of leaking sensitive information
SEBI had previously banned Infosys's senior corporate counsel Pranshu Bhutra and Venkata Subramaniam, senior principal, Corporate Accounting Group, from accessing capital markets for insider trading. A SEBI order stated that these officials were found to have leaked UPSI related to the company's audited financial results for the quarter ended June 30, 2020. "There is ample prima facie evidence which demonstrates that entities have been in violation of SEBI Act and Prohibition of Insider Trading (PIT) Regulations," the order read.
Settlement agreement
Infosys CEO settles charges without admission of guilt
Parekh, who was the CEO and MD of Infosys during the announcement of the partnership with Vanguard, proposed to settle the charges without admitting or denying them. SEBI confirmed receipt of the settlement amount and stated that the proceedings have been resolved as per agreed terms. The High Powered Advisory Committee (HPAC) had recommended this settlement. It was accepted by SEBI's Panel of Whole Time Members on May 21, 2024. The payment was made on June 7.