Infosys settles insider trading charges with SEBI for Rs 25 lakh

Bengaluru, 27 June: IT major, Infosys’ CEO Salil Parekh has settled charges of violating provisions of insider trading and agreed to pay Rs 25 lakh for failing to have adequate controls to prevent the same, the Securities and Exchange Board of India (SEBI) said in a notification on Thursday.

According to the market regulator, it was found that Infosys had violated provisions of the SEBI Act and PIT Regulations, 2015. “During the course of investigation, it was found that certain information which was Unpublished Price Sensitive Information (UPSI) had not been considered as such by Infosys,” the market regulator said.

The current case was related to Infosys’ partnership with Vanguard in 2020. “The investigation by SEBI inter-alia referred to Infosys’ own analysis that identified the strategic importance of the partnership for the expansion of their own business and revenue; and concluded that the said partnership would result into expansion of business for Infosys. The investigation concludes that the information related to the strategic partnership was covered under Regulation 2(1)(n)(iv) of the definition of UPSI under the PIT Regulations, 2015,” the order said.

As the current norms make the CEO & MD responsible for putting in place adequate and effective system of internal control to ensure compliance for preventing insider trading, a notice has been sent to Infosys in this regard after which Parekh sought to settle the case.

According to the notification, Infosys has informed the market regulator that its practice to identify UPSI (Unpublished Price Sensitive Information) has been placed before company’s audit committee and the Board for guidance and approval. Similarly, the practice of breaking the TCV (Total Contract Value) of any deal into average revenue per annum for comparing with the annual revenue of Infosys has also been informed to the audit committee and Board.