Infosys fines director for insider trading

Firm asks Kiran Mazumdar-Shaw to pay Rs. 9.500000 for selling shares without nod Infosys Limited has said that it has imposed a penalty of Rs. 9.5000000 on its lead independent director Kiran Mazumdar-Shaw for “inadvertent trade” in the company stock that is violative of insider trading regulations. Infosys disclosed this in a regulatory filing with the stock exchanges. The IT major said that it would also notify the regulator, Securities and Exchange Board of India (SEBI), of this “inadvertent trading” by Ms. Mazumdar-Shaw. “On February 13, 2019, it was brought to the attention of the compliance officer of Infosys Limited that Ms. Kiran Mazumdar-Shaw, lead independent director of the company, had inadvertently, through her portfolio management services, sold 1,600 shares of Infosys without obtaining pre-clearance of trade (“trade”). The trade occurred when the trading window was open,” the company said. The trade was carried out by the portfolio manager without the knowledge of Ms. Mazumdar-Shaw, the company further said in its regulatory filing. “In portfolio management services, the investor does not generally monitor the day-to-day investment decisions. In this case as well, Ms. Mazumdar-Shaw had given no instruction to conduct the trade and she also had no knowledge of the trade having occurred. The portfolio manager unilaterally took the decision to conduct the trade,” the company further said. The audit committee of the company's board, responsible for review of compliance with the insider trading policy of the company, was informed of this matter. “Based on Ms. Mazumdar-Shaw’s submission, the audit committee believes that this was an inadvertent trade made without intent to violate the Infosys’ insider trading policy or the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”).” The audit committee, however, felt that that there was a violation of the Infosys’ insider trading policy and the PIT Regulations. Hence, the fine was imposed on Ms. Mazumdar-Shaw. “The penalty amount shall be payable to a charitable organisation of her choice,” the company said.