Infosys fines Kiran Shaw for inadvertently selling shares during market hours


Bengaluru: Infosys on Thursday 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.

The company notified the BSE that this development was brought to the attention of the Compliance Officer of Infosys on February 13.

“The trade was carried out by the portfolio manager without the knowledge of Mazumdar-Shaw. In portfolio management services, the investor does not generally monitor the day-to-day investment decisions. In this case as well, Mazumdar-Shaw had given no instruction to conduct the trade and she also had no knowledge of the trade having occurred. The portfolio manager unilaterally took the decision to conduct the trade,” said Infosys in its filing to the BSE.

The company’s Audit Committee determined there was a violation of insider trading policy and levied a penalty of Rs 9.5 lakh that she has to pay to a charitable organisation of her choice. However, it also clarified that it was an inadvertent trade made without intent to violate insider trading regulations of SEBI as well as of Infosys.

In January 2017, Infosys former board member Ravi Venkatesan had inadvertently bought 50 shares of the company during the trading closure window violating its insider trading policy.

Infosys had said Venkatesan did not give instructions for the purchase of the shares, which was made through his portfolio management services account, and was unaware of the trade. The trade was made by Venkatesan’s fund manager for all his clients.

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In another case in 2017, Mindtree executive chairman Krishnakumar Natarajan had informed the company that he inadvertently violated its insider trading programme as his his portfolio management services company bought 240 equity shares of the company sold.





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