INFOSYS FINED ITS INDEPENDENT DIRECTOR FOR TRADING OF ITS SHARES DURING OPEN TRADING WINDOW PERIOD
Channel: R V Seckar
Date: 16/08/2020

INFOSYS FINED ITS INDEPENDENT DIRECTOR FOR TRADING OF ITS SHARES DURING OPEN TRADING WINDOW PERIOD
Infosys Limited on 14 August 2020 has notified the stock exchanges of the occurrence of an inadvertent trade by a designated person. The Portfolio management services of Bela Parikh, spouse of Bobby Parikh, an Independent Director of the Company, had bought 2,754 shares during the open trading window period without the knowledge of Bobby Parikh and without obtaining pre-clearance of trade.
 Bobby Parikh is the joint holder of that account. Mr. Parikh has confirmed that he was not in possession of
any Unpublished Price Sensitive Information (UPSI).
The Audit Committee of the Company was notified of this matter. Based on Mr. Parikh’s submission, the Audit Committee has concluded that this was an inadvertent trade made without intent to violate the Company’s insider trading Policy or the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("PIT Regulations"). 
However, the Audit Committee has determined that there was a violation of the Company’s Policy and PIT Regulations and has therefore imposed on Mr. Parikh, a penalty of INR 2,00,000 which amount shall be remitted to Investor Protection Education Fund (IPEF) in line withthe PIT Regulations.
Earlier also , Infosys fined Independent Director for inadvertently selling shares during market hours
Infosys 1st March 2019 said it has fined its lead independent director Kiran Mazumdar-Shaw for “inadvertently “ selling 1,600 shares of the company during the open trading window.
The shares were sold by her portfolio management services without obtaining clearance, Infosys said in filing to the stock exchanges. Shaw, who was not aware of the transaction, was fined Rs 9.5 lakh that she needs to pay to a charity organisation.
Lessons Learned
• As soon as there is an origination of UPSI with an insider, the trading window must be closed at that point of time. As regards how long should it last, the Regulations provide a minimum of 48 hours’ time until the UPSI is made generally available
• Other than trading window closure for quarterly financial results, there can be other event-bases situations during which the trading window must be closed.
(i) dividends;
(ii) change in capital structure;
(iii) mergers, de-mergers, acquisitions, delistings, disposals
and expansion of business and such other transactions;
(iv) changes in key managerial personnel

In the above case , Mr. Parikh’s ,spouse of the Independent Director sold shares during the open trading window.
Earlier also , independent director Kiran Mazumdar-Shaw for “inadvertently “ sold 1,600 shares of the company during the open trading window.
This shows that Independent Directors have no adequate knowledge about SEBIs PITs regulation and UPSI. Hence , Infosys should come forward to educate its independent directors on the above.