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Oops- Biocon chief fined Rs 9.5 lakh by Infosys


Oops- Biocon chief fined Rs 9.5 lakh by Infosys

In its filing, the company stated that such trade is a violation of the Company’s Insider Trading Policy and the Sebi (Prohibition of Insider Trading) Regulations, 2015.

Bengaluru: Biocon Chief, Kiran Mazumdar Shaw has been fined of Rs 9.5 lakh by the IT services company, Infosys. The company notified the bourses that its lead independent director, Kiran Mazumdar Shaw has inadvertently sold 1600 shares of the company without seeking prior permission to execute such a trade. The company’s audit committee imposed a penalty of Rs 9.5 lakh on Shaw and said the amount was payable to a charitable institution of her choice.

According to the statement, the trade was carried out by Shaw’s portfolio manager. However, Shaw was unaware of the transaction. The shares were sold without her knowledge during an open trading window period 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.

Also Read: Launching product without Approval: DOP rejects Biocon Plea against NPPA action

In its filing, the company states that such trade is a violation of the Company’s Insider Trading Policy and the Sebi (Prohibition of Insider Trading) Regulations, 2015.

According to corporate governance experts, key management personnel and directors have to take prior permission from the company before executing any trade in its shares during market hours.

“Directors have to submit a trading plan to the company and take prior permission before executing such trade. In this case, the move is to self-censure and give a message that the company is in compliance with all regulations,” Shriram Subramanian, founder of corporate governance advisory firm InGovern told Business Standard.

Infosys notified the BSE that this development was brought to the attention of the Compliance Officer of the company on February 13, following which it was examined by its audit committee with a submission from Mazumdar Shaw.

The audit committee concluded that the trade was an inadvertent one without any intention to violate the insider trading norms.

However, the committee of the company’s board of directors has imposed a fine of Rs 9.5 lakh for the breach of regulations. The penalty amount is payable to the charitable organisation of  Shaw,s choice.

A couple of years ago, ex-Infosys independent director Ravi Venkatesan accidentally bought 50 shares of Infosys and the trade had occurred when the trading window was closed.

The shares were purchased by his fund manager and he was unaware of the trade. Venkatesan then sold the shares without profit. Infosys’s audit committee had imposed a penalty of Rs 1 lakh to be made to a charitable organisation of his choice.

Also Read: Biocon chief Kiran Shaw says it’s a struggle to find an adequate number of women for leadership roles



Source: with inputs
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