INFOSYS FINED ITS INDEPENDENT DIRECTOR FOR TRADING OF ITS SHARES DURING ...

INFOSYS FINED ITS
INDEPENDENT DIRECTOR FOR TRADING OF ITS SHARES DURING OPEN TRADING WINDOW
PERIOD

Infosys Limited on 14 August
2020 has notified the stock exchanges of the occurrence of an inadvertent trade
by a designated person. The Portfolio management services of Bela Parikh,
spouse of Bobby Parikh, an Independent Director of the Company, had bought
2,754 shares during the open trading window period without the knowledge of
Bobby Parikh and without obtaining pre-clearance of trade.

 Bobby Parikh is the joint holder of that
account. Mr. Parikh has confirmed that he was not in possession of

any Unpublished Price
Sensitive Information (UPSI).

The Audit Committee of the
Company was notified of this matter. Based on Mr. Parikh’s submission, the
Audit Committee has concluded that this was an inadvertent trade made without
intent to violate the Company’s insider trading Policy or the SEBI (Prohibition
of Insider Trading) Regulations, 2015 ("PIT Regulations").

However, the Audit Committee
has determined that there was a violation of the Company’s Policy and PIT
Regulations and has therefore imposed on Mr. Parikh, a penalty of INR 2,00,000
which amount shall be remitted to Investor Protection Education Fund (IPEF) in
line withthe PIT Regulations.

Earlier also , Infosys fined
Independent Director for inadvertently selling shares during market hours

Infosys 1st March 2019 said
it has fined its lead independent director Kiran
Mazumdar-Shaw for “inadvertently “ selling 1,600 shares of the company during the open
trading window.

The shares were sold by her
portfolio management services without obtaining clearance, Infosys said in
filing to the stock exchanges. Shaw, who was not aware of the transaction, was
fined Rs 9.5 lakh that she needs to pay to a charity organisation.

Lessons
Learned

·     As
soon as there is an origination of UPSI with an insider, the trading window must
be closed at that point of time. As regards how long should it last, the Regulations
provide a minimum of 48 hours’ time until the UPSI is made generally available

·     Other
than trading window closure for quarterly financial results, there can be other
event-bases situations during which the trading window must be closed.

(i)
dividends;

(ii)
change in capital structure;

(iii)
mergers, de-mergers, acquisitions, delistings, disposals

and
expansion of business and such other transactions;

(iv)
changes in key managerial personnel

In
the above case , Mr. Parikh’s ,spouse of the Independent Director sold shares during
the open trading window.

Earlier
also , independent director Kiran Mazumdar-Shaw for “inadvertently “ sold 1,600
shares of the company during the open trading window.

This
shows that Independent Directors have no adequate knowledge about SEBIs PITs
regulation and UPSI. Hence , Infosys should come forward to educate its
independent directors on the above.