Sebi said that although the outside entities had traded in several stocks through the year, their trading activities were concentrated in Infosys only during the weeks adjacent/close to when the company announced its financial results. This was observed for the quarters ended December 2019, March 2020, June 2020 and September 2020, the order by the Sebi’s whole-time member Madhabi Puri Buch noted. The bank accounts of all the six outside entities have been impounded.
A spokesperson for Infosys said that the company was cooperating with Sebi in its investigation in this case and has also started an internal probe.
In the 55-page order, Sebi noted that in July 2020 the regulator’s internal surveillance system gave an alert about possible insider trading in the company’s stocks, following which it started an investigation. It found out that Pranshu Bhutra, senior corporate counsel, and Venkata Subramaniam V V, senior principal (corporate accounting group), had insider information about the company’s financial results and were also in regular communication with each other.
Sebi’s probe further showed that Pranshu was in constant contact with Amit Bhutra, an outsider who in turn was in touch with Bharath C Jain. The two were partners at investment firm Capital One Partners. It was also found that Amit, Ankush Bhutra and Manish Champalal Jain were working partners of Tesora Capital.
Sebi investigations revealed that Pranshu of Infosys, who had inside information, had transferred funds to Amit. It also found that both Capital One Partners and Tesora Capital liquidated their positions in Infosys soon after the results. Those trading activities brought in a combined gain of Rs 3.1 crore. The probe did not find Subramaniam to be directly in touch with any of the six outside entities. However, he was found to be in possession of insider information and in touch with Pranshu in his professional capacity, and hence has been charged by the regulator.
When contacted by TOI, a spokesperson for Infosys said that on June 1, the company was informed of an interim ex parte Sebi order in which “two of its employees, amongst other third parties, have been named 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has a well-defined Code of Conduct covering all its employees and an Insider Trading Policy that governs dealing with unpublished price sensitive information.”
Infosys also said it will extend full cooperation to the regulator in this matter. “Additionally, as a result of the order, an internal investigation is being initiated and appropriate action will be taken on the conclusion of such investigation,” it said.