Sebi lifts restrictions placed on Infosys employees, connected entities; dismisses insider-trading allegations

Orders from 2021 had placed these restrictions on employees and connected entities

Capital market regulator SEBI has lifted restrictions placed on employees of Infosys and connected entities, by vacating directions issued through an interim order and a confirmatory order in 2021.

Restrictions had been placed based on allegations of insider trading.

In the final order dated September 9, 2024, the Securities and Exchange Board of India said that proceedings against all the 16 noticees in the earlier orders have been disposed off without any direction.

It also released any amount impounded from entities alleged to have benefited from these trades.

Also read: Freedom to fail in R&D is unfortunately absent in India, says Infosys cofounder Kris Gopalakrishnan

The regulator had investigated allegations of insider trading during the period from December 1, 2019, to November 30, 2020 covering financial results for four quarters. The regulator also looked into periods outside of this whenever necessary.

Sebi passed an interim order in May 2021 and a confirmatory order in December 2021. Two employees of the company and noticees in these orders, Pranshu Bhutra and Venkatasubramaniyam VV filed appeals with the Securities Appellate Tribunal (SAT) which quashed the regulator's orders in April 2022.

Later, based on the findings of an investigation, all 16 noticees (including Bhutra and Venkatasubramaniyam) were issued a showcause notice in December 2022.

According to the showcause notice, Bhutra was alleged to have access to unpublished price sensitive information (UPSI) because of his frequent interactions with Venkatasubramaniyam (Noticee No. 8) and Sunil Kumar Dareshwar (Noticee No. 9).

It was alleged that Bhutra then passed on this information to Amit Bhutra (Noticee No. 2), who passed on the information to the other noticees.

But, as the final order stated, there was no sufficient information to sustain the allegation that Venkatasubramaniyam and Dareshwar had passed on the information to Bhutra.

It added, "Once the allegations against Pranshu that he had access to UPSI fail, the allegation that Pranshu (Bhutra) had communicated the UPSI to Ankit Bhutra cannot be sustained. As a consequence of the same, the allegations against all other Noticees do not stand."