Infosys, CEO Parekh settle insider trading matter with Sebi; pay Rs 25 lakh

Matter pertains to 2020-21 when IT major entered into a partnership with global asset manager Vanguard

Information technology (IT) major Infosys and Salil Parekh, its chief executive officer, have settled with the Securities and Exchange Board of India (Sebi) a matter related to alleged insider trading violation by agreeing to pay Rs 25 lakh.

The matter pertains to a partnership announcement between Infosys and US-based global asset manager Vanguard in July 2020. Under the agreement, Infosys would provide a Cloud-based record-keeping platform to Vanguard.

The partnership between the two companies should have been treated as unpublished price sensitive information (UPSI), according to Sebi rules. However, Infosys failed to do so.

Major announcements and deals are called UPSI under Sebi’s Prohibition of Insider Trading (PIT) Regulations to curb manipulation or misuse of information that may lead to significant impact on the stock prices.

The market regulator had issued a show-cause notice to Infosys in August 2023 following which the company filed for consent settlement plea – under which an alleged wrongdoer can settle the case without admitting or denying the guilt by agreeing to pay a penal account or under a market ban or both.

The settlement application by Infosys was approved by Sebi’s High Powered Advisory Committee (HPAC).

In its application, the IT firm said that the practice followed within the company to identify UPSI has been placed before the audit committee and board for guidance and approval. It has also been converted into a written and approved policy.

“The practice of breaking the total contract value of any deal into average revenue per annum for comparison with the annual revenue of Infosys has also been informed to the Audit Committee and Board of Infosys,” the company said in its application.

Infosys shares traded 0.3 per cent higher at Rs 1,546 at 11.12 am on Wednesday.