Infosys CEO Salil Parekh has reached a settlement with the Securities and Exchange Board of India (SEBI) regarding insider trading violation allegations. Parekh has agreed to pay ₹25 lakh to resolve the matter, as confirmed by SEBI on Thursday.
The case originated from a SEBI investigation that revealed Infosys had not adhered to insider trading regulations between June 2020 and September 2021. The company failed to properly classify certain information as Unpublished Price Sensitive Information (UPSI), a violation of SEBI Act and PIT Regulations, 2015.
The insider trading allegations were linked to Infosys’ strategic partnership with Vanguard in 2020. This partnership was considered critical for Infosys’ business expansion and revenue growth, and the information surrounding it should have been classified as UPSI.
Salil Parekh proposed the settlement without admitting or denying the charges. SEBI has confirmed the receipt of the settlement amount and the closure of the proceedings as per the agreed terms.
Market Impact and Regulatory Compliance:
Despite the settlement, Infosys shares saw a marginal increase of 0.30 percent, trading at ₹1,545.95 on Thursday.
The incident highlights the stringent regulatory requirements for listed companies in India. As per regulations, the CEO and MD are directly responsible for ensuring robust internal controls to prevent insider trading. SEBI’s order underscored the importance of classifying strategic partnerships, such as the one with Vanguard, as UPSI and adhering to insider trading norms.
While the settlement concludes this specific case, it serves as a reminder of the importance of regulatory compliance and transparent information disclosure for listed companies. The incident may prompt increased scrutiny of insider trading practices within the Indian corporate landscape.
