Technology giant Infosys’ CEO Salil Parekh has settled with the Securities and Exchange Board of India (Sebi) a matter related to an alleged insider trading violation by paying Rs 25 lakh.The case pertains to a partnership announcement between Infosys and US-based global asset manager Vanguard in 2020, wherein Infosys would provide a cloud-based record-keeping platform to Vanguard.
According to Sebi regulations, the partnership between the two companies should have been treated as unpublished price-sensitive information (UPSI). However, Infosys failed to do so.Parekh, who was the CEO and MD of Infosys at the time of the announcement of the partnership, was responsible for putting in place “adequate and effective systems of internal controls to ensure compliance with the regulations to prevent insider trading”, as per Sebi’s regulations.
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Such major announcements and deals are considered UPSI under Sebi’s Prohibition of Insider Trading (PIT) regulations to curb manipulation or misuse of information that can lead to significant impacts on the company’s stock prices.Following Sebi’s show-cause notice to Infosys in August 2023, the company filed for a consent settlement plea – under which an alleged wrongdoer can settle the case without admitting or denying guilt by agreeing to pay a penal amount or face a market ban or both.The settlement application by Infosys was approved by Sebi’s High Powered Advisory Committee (HPAC).
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