Software major Infosys has said that it has initiated an internal investigation in the matter of insider trading in its scrip wherein SEBI has barred two of its employees among others.
In a statement, the company said that on Tuesday, it was informed of the interim ex-parte order by the capital market regulator.
"The company will extend full cooperation as required to the SEBI on the matter. Additionally, as a result of the order, an internal investigation is being initiated and appropriate action will be taken on conclusion of such investigation," it said.
Infosys added that it has a "well-defined Code of Conduct covering all its employees and an Insider Trading Policy that governs dealing with unpublished price sensitive information".
In an order on Monday, the Securities and Exchange Board of India (SEBI) barred eight entities, including individuals and two financial companies, for being involved in insider trading in the scrip of Infosys.
The entities are Pranshu Bhutra, Amit Bhutra, Bharath C. Jain, Manish C. Jain, Ankush Bhutra, Venkata Subramaniam V.V., and firms Capital One Partners and Tesora Capital. The investigation found that the total proceeds generated from insider trading were over Rs 3.06 crore.
The SEBI has directed the impounding of the bank accounts of those involved and also asked them to create an escrow account jointly and severally and deposit the impounded amount in that account, within 15 days from the order.
Pranshu Bhutra, a Senior Corporate Counsel of Infosys, being an officer or employee of the software major, is a connected person and was reasonably expected to have access to the UPSI (unpublished price-sensitive information) and on preponderance of probability basis, he was in possession of the UPSI, the order said.
Amit Bhutra and Bharath C. Jain are working partners of Capital One, while, as per a partnership deed of Tesora Capital, Amit Bhutra, Ankush Bhutra and Manish C. Jain are working partners of Tesora.
SEBI Order
As per the SEBI order, Capital One Partners and Tesora Capital had made illegal gains of Rs 2.79 crore and Rs 26.82 lakh, respectively, by indulging in insider trading while in possession of UPSI, pertaining to the corporate announcement of audited financial results for the quarter ended June 30, 2020 made by Infosys.
"Capital One and Tesora had traded in the scrip of INFY in the F&O segment just prior to announcement of financial results for the quarter ended June 30, 2020 and soon after the announcement, subsequently offloaded/squared off their positions such that net positions were zero," said the order dated May 31.
SEBI said that, separately, Venkata Subramaniam V.V., a Senior Principal, Corporate Accounting Group of Infosys, has been identified as a designated person by the company for the purpose of the UPSI.
The regulator noted that he had been in frequent communication with Pranshu Bhutra through professional relationship as both are employees of Infosys and had telephonic communication during the UPSI period.
The order copy said that on a preponderance of probability basis, Venkata Subramaniam had communicated the UPSI to Pranshu Bhutra and Pranshu Bhutra had procured UPSI from Venkata Subramaniam, and thereby, both had prime facie violated the provision of SEBI Act and PIT Regulations.
