Breaching code of conduct
Bangalore, Aug. 31
Infosys Technologies Ltd has levied a fine of Rs 5 lakh on its Executive Director, Mr Srinath Batni, for violating the company's code of conduct. He was fined for failing to notify the company in time that he sold 10,000 company shares the week before. Infosys' insider trading rules state that directors and officers may buy or sell company shares only after prior notification to the company. Further, notification must also be given within one working day following the execution of such transactions.
Mr Batni notified the company of his intent to sell his equity shares and sold them during an open trading window on August 14, 2006. However, Mr Batni inadvertently failed to notify the company about the sale of the equity shares within one working day after the transaction. Mr Batni notified the company of the transaction on August 23, 2006, Infosys said in a filing to the SEC.
The audit committee of the company's board of directors, responsible for review of the company management's monitoring of compliance with its standards of business conduct, determined that Mr Batni's failure to notify the company of the sale of equity shares in time was a technical violation of the insider trading rules, and therefore imposed a penalty of Rs 5 lakh on Mr Batni; he has been directed to pay his fine to a charity.