Market regulator SEBI has busted an insider trading case in Infosys, one of the largest IT companies in India.

SEBI has found that there were a few people who were trading in the shares of Infosys when in possession of the company’s financial results ahead of its being put out in the public domain.

SEBI found that Venkata Subramaniam V. V, (senior principal, Corporate Accounting Group) and Pranshu Bhutra, Senior Corporate Counsel of Infosys, were deemed insiders who had frequent communications with the traders betting on Infosys shares before the company put out its financial results.

SEBI has barred 8 entities involving individuals from the stock markets and fined them ₹3.06 crore for their role in the racket. Those barred entities are Pranshu Bhutra, Amit Bhutra, Bharat C Jain, Manish Champalal, Ankush Bhutra, Capital One, Tesora and Subramaniam. SEBI has said that Subramaniam had frequent communication with Pranshu Bhutra.

Not the first time

This is not the first time that SEBI has found that financial results of a large corporation were leaked. Earlier, SEBI conducted a massive investigation into the results leak case where it had found that key financial numbers of companies like Asian Paints, Bajaj Auto and Ambuj Cements were leaked and circulated via WhatsApp.

In the case of Infosys, based on an extract of the Structured Digital Database related to the financial results of Infosys for the quarter ended June 30, 2020, the Unpublished Price Sensitive Information (UPSI) came into existence on June 29, 2020. Thus, the UPSI period was from June 29, 2020, to July 15, 2020. The entities made illegal gains while trading in Infosys when in possession of the UPSI.

Amit and Bharath are working partners of Capital One. Amit, Ankush Bhutra and Manish Champalal Jain are working partners of Tesora. Capital One Partners and Tesora Capital made illegal gains of ₹2.795 crore and ₹26.82 lakhs respectively through insider trading, SEBI said.

Profits through F&O

“Capital One and Tesora had traded in the scrip of Infosys in the F&O segment just prior to announcement of financial results for the quarter ended June 30, 2020, and soon after the announcement, offloaded/squared off their positions such that net positions were zero. Amit and Bharath, both had placed orders / given trading instructions on behalf of Capital One. Amit had placed orders / given trading instructions on behalf of Tesora. Thus, Capital One and Tesora had traded in the scrip of Infosys in F&O segment while in possession of UPSI,” SEBI said.

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