Infosys CEO and MD Salil Parekh settles insider trading case with Sebi: Salil Parekh, MD and CEO of the country’s leading IT company Infosys, has settled a case related to insider trading by paying money. This case of alleged violation of norms related to insider trading came to light during SEBI’s investigation. SEBI has stated in its latest settlement order that the MD and CEO of Infosys had offered Rs 25 lakh to settle the matter, which was accepted and the case has been settled. With this, the action initiated against Parekh through a show cause notice issued by SEBI on 3 August 2023 has been stopped.
Allegations of failure to prevent insider trading
Under the rules related to insider trading, it is the responsibility of the CEO and MD of any listed company to create an adequate and effective system of internal control to prevent insider trading. But according to PTI, SEBI’s investigation revealed that Salil Parekh had allegedly failed to create such a necessary system to prevent insider trading in Infosys. This case of alleged insider trading in Infosys shares came to light during SEBI’s investigation between 29 June 2020 and 27 September 2021.
Also read : Quant Mutual Funds: Quant funds are still number one in 8 categories, far ahead of the second ranked scheme in 7
SEBI approves Parekh’s settlement offer
According to PTI, the market regulator had found in its investigation that Infosys had not kept some information falling under the category of ‘Unpublished Price Sensitive Information’ (UPSI) in this category. After this came to light in SEBI’s investigation, Salil Parekh had proposed that he is ready to settle the matter through a settlement order. Under which the facts found in SEBI’s investigation will neither be rejected nor accepted. In the same proposal, he also offered to pay Rs 25 lakh to SEBI. In the order passed on Wednesday, SEBI has said that it has “accepted the settlement amount and the terms of settlement and has closed the proceedings initiated against the applicant (Parekh) through a show cause notice on August 3, 2023… This has been done under the rules related to settlement.”
Also read: HDFC Mutual Fund: 8.30 crores deposited from SIP of 10 thousand! The wonder of this 27 year old large cap fund
what is the whole matter
According to the news agency, the whole matter is related to the announcement of a strategic partnership agreement between Infosys and US asset manager firm Vanguard in July 2020. Under this deal, Infosys was to provide a cloud-based record keeping platform to Vanguard. SEBI had found in its investigation that at the time of this announcement, Infosys CEO and MD Salil Parekh had not followed the rules related to insider trading. In this regard, in an interim order passed in September 2021, SEBI had held both the companies guilty of violating the rules in the case of alleged insider trading in Infosys shares. After this, SEBI also passed a confirmatory order in December 2021.