New Delhi, Jun 27 (PTI) IT giant Infosys’ MD and CEO Salil Parekh has settled with markets regulator Sebi a case pertaining to alleged violation of insider trading norms after paying Rs 25 lakh.
He allegedly failed to put in place “adequate and effective systems” of internal control to ensure compliance for preventing insider trading, according to an order passed by the Securities and Exchange Board of India (Sebi).
The case emerged from Sebi’s investigation between June 29, 2020, and September 27, 2021, in the matter of alleged insider trading in the scrip of Infosys. The regulator probe found that certain information which was Unpublished Price Sensitive Information (UPSI) had not been considered as such by Infosys.
The latest ruling came after Parekh proposed to Sebi to settle the alleged violations “without admitting or denying the findings of fact” through a settlement order.
“In view of the acceptance of the settlement terms and receipt of settlement amount by Sebi, the specified proceedings initiated against the applicant (Parekh) vide Show Cause Notice dated August 3, 2023, are disposed of in terms of … the settlement Regulations,” Sebi said in its order passed on Wednesday.
The case relates to a partnership announcement between Infosys and US-based asset manager Vanguard in July 2020. Under the deal, Infosys was required to provide a cloud-based record keeping platform to Vanguard.
The partnership, between Infosys and Vanguard, considered as an expansion move for the IT firm, fell under the ambit of Unpublished Price Sensitive Information (UPSI) requiring compliance with insider trading norms. However, the information had not been considered as such by Infosys.
Under the insider trading rules, the CEO and MD of a listed company is responsible for putting in place an adequate and effective system of internal control to ensure compliance for preventing insider trading.
In its order, Sebi noted that Salil Parekh was the CEO and MD of Infosys at the time of the announcement of the strategic partnership between Infosys and Vanguard and Sebi’s investigation concluded that by not complying with the rule, Parekh allegedly violated insider trading rules.
In September 2021, the Sebi passed an interim order in September 2021 against two entities for prima facie violation of the provisions of insider trading rules in the context of alleged insider trading in the scrip of Infosys. Following this, a confirmatory order was passed in December 2021. PTI SP DR
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