Sebi clears Infosys staff of insider trading, lifts restrictions | Stock Market News

Mumbai: The Securities and Exchange Board of India (Sebi) on Monday lifted the restrictions imposed in a 2021 order on a section of Infosys employees, and connected entities, following allegations of insider trading.

On 15 September 2021, Sebi had upheld its interim order of 31 May 2021, barring six entities—Pranshu Bhutra, Amit Bhutra, Bharath C. Jain, Capital One Partners, Tesora Capital, and Venkata Subramaniam V.—from trading in the company’s securities.

Pranshu Bhutra and Subramaniam held senior positions at Infosys. Sebi also investigated the trading activity of Capital One and Tesora Capital, both partnership entities.

Subsequently, in May 2022, the Securities Appellate Tribunal (SAT) lifted the restrictions on the noticees. However, Sebi continued its investigation into the allegations and later issued the final order on Monday.

According to Sebi, the evidence on record was insufficient to support the allegations against Pranshu and Amit Bhutra, leading to the dismissal of allegations against all noticees.

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“I hereby direct that the restraint imposed on noticees 2 to 7 through interim order read with the confirmatory order shall stand vacated with immediate effect. The instant proceedings against all noticees are disposed of without any direction,” Sebi’s whole-time member Ashwani Bhatia said.

The allegations were that the entities traded in Infosys futures and options just before the announcement of financial results for the quarter ended 30 June 2020. According to Sebi, the unpublished price-sensitive information (UPSI) period spanned 29 June to 15 July 2020.

The central issue revolved around the fact that Subramaniam was listed as a designated person with reasonable access to the company’s UPSI, while Amit Bhutra and Jain were working partners at Capital One, and Amit Bhutra was a partner at Tesora. 

Sebi noted that the combination of these factors, coupled with phone calls between Pranshu Bhutra to Subramaniam and then to his cousin Amit Bhutra before the trades were executed by Capital One and Tesora, prima facie created a credible suspicion of insider trading. 

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The chain of connections and activities among the entities supported this suspicion based on the weight of evidence, Sebi added.

In its final order, Sebi, however, stated that its investigation had failed to establish any evidence of calls exchanged between Venkat and Sunil during the UPSI period for the quarter ended 30 June 2022.

“In my view, given that it has not been proved that Venkat had access to UPSI, no adverse finding may be drawn from the above mentioned observation. Once the allegations against Pranshu that he had access to UPSI failed, the allegation that Pranshu had communicated the UPSI to Ankit Bhutra cannot be sustained. As a consequence, the allegations against all other noticees do not stand”, the Sebi order added.

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