An order passed on May 31 by Madhabi Puri Buch, whole time member of the Securities Exchange Board of India, barred two senior executives of Infosys – Pranshu Bhutra and Venkata Subramaniam from buying, selling or dealing in securities, either directly or indirectly until further orders. Both the executives held senior positions at the legal and accounting department respectively and had access to Unpublished Price Sensitive Information, according to the SEBI order. Based on a system generated alert on insider trading alerts of Infosys for around the period of July 15, 2020, SEBI conducted a preliminary investigation and passed an ex-parte order based on the material available on record. Apart from the employees, Amit Bhutra, Bharath C Jain, Capital One Partners, Tesora Capital, Manish C Jain, Ankush Bhutra have all been held for insider trading of Infosys scrip.
In its order SEBI stated, “It is noted that Venkata has been in frequent communication with/is connected with Pranshu through (a) professional relationship (both are officers/employees of INFY) and (b) telephonic communication during the UPSI period. Thus, Pranshu is also reasonably expected to have access to the UPSI through Venkata and on a preponderance of probability basis he was in possession of the UPSI.”
According to the order, Pranshu was connected to the others mentioned through various other business connections. Call records examined showed constant communication during the said window between Pranshu, Amit and Bharath, partners of Capital One, (both were giving trading instructions on behalf of Capital One). Amit was also giving trading instructions on behalf of Tesora. “Venkata had communicated the UPSI to Pranshu and Pranshu had procured UPSI from Venkata and thereby Venkata and Pranshu had prime facie violated the provision of SEBI Act and PIT Regulations,” the order further said.
Infosys in a statement to the BSE said that on June 1, the company was informed of an interim ex-parte SEBI order on two of its employees, amongst other third parties, in an ongoing insider trading investigation. “Infosys has a well-defined Code of Conduct covering all its employees and an Insider Trading Policy that governs dealing with unpublished price sensitive information,” the statement said. Infosys said that it would extend full cooperation to SEBI on the matter, and additionally, would initiate an internal investigation and take appropriate action based on the findings. However the aggrieved parties can file their replies or objections within 21 days and also opt for a personal hearing.