The Indian regulator is turning up the heat on two executives who may have illegally traded Infosys shares.
Markets regulator Sebi on Monday passed a confirmatory order (pdf) against an Infosys employee and his connected person, who was an employee of Wipro Ltd, in a matter related to alleged insider trading in Infosys shares.
Sebi said Ramit Chaudhari and Keyur Maniar “should desist from directly accessing the securities market till the completion of the ongoing investigation into the matter.” Through an interim order passed in September, Sebi had barred them from accessing securities market and had also directed impounding of illegal proceeds of Rs 2.62 crore (EUR 310,000).
“The prima facie findings in the Interim Order against the Noticees, such as Ramit being an employee of Infosys group company and as part of Vanguard deal, was having access to the UPSI,” Sebi said. This he apparently passed on to Keyur, his old colleague in Wipro, thereby aiding Keyur to trade in the scrip of Infosys while being in possession of the said UPSI continue to strongly hold on to ground,” Sebi said.
Money impounded, but Sebi makes concessions
The actions were taken after the pair were investigated for insider trading of Infosys stock. Maniar, a Wipro employee, had started selling stocks the very day after an internal announcement, made to a subset of Infosys, revealed that Vanguard had chosen to partner with the company in a deal that would eventually send the stock soaring.
Maniar had almost no trading history the nine months prior to the transaction that earned him over 300,000 euros. Automated systems at SEBI therefore detected suspicious activity and triggered an investigation into insider trading.
The investigation revealed a relationship between Infosys’s Chaudhri – who had exclusive knowledge of the partnership – and Maniar. Not only were they former colleagues at Wipro, they also shared a phone call just minutes before Maniar began trading.
However, the regulator made some comcessions – such as allowing the pair to hold on to mutual funds. The impounded sum remains in an escrow account with lien in favor of SEBI until further orders