Infosys turmoil: Will keep an eye on its stock price, says Sebi chief

This comes in the backdrop of high profile board and management exits from the company

Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi said on Tuesday the capital markets regulator was keeping a close watch on the share price movement of information technology (IT) bellwether Infosys.

The stock of Infosys has plunged about 14 per cent since Vishal Sikka’s sudden resignation as chief executive officer on Friday amid differences with the company's founders.

“We are keeping a watch on Infosys share prices,” Tyagi told reporters after a meeting of the Financial Stability and Development Council in New Delhi.

Shares of the IT services major plunged nearly 10 per cent on Friday, wiping out Rs 22,519 crore from its market valuation. The shares fell further by over 5 per cent on Monday despite a buyback announcement of Rs 13,000 crore by the company on Saturday. On Tuesday, it closed almost flat at Rs 877.15 a share.

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Asked for further comment on Infosys, Tyagi said corporate governance remained a big problem in India, and that a panel formed in June to recommend better corporate governance standards would submit its report by September-end.

The 21-member panel is chaired by Uday Kotak, executive vice-chairman and managing director of Kotak Mahindra Bank. It has representatives from corporate India, stock exchanges, legal firms, Sebi and proxy advisory firms.

Tyagi also said Sebi would continue to examine the securities law violations by listed firms even after identifying 331 ‘shell’ companies. “Wherever there is a violation of securities law, it has to be investigated and looked into irrespective of whether it is shell or whatever name you give them. One does not wait for any reference from anywhere,” he said.

He also said the regulator was sticking to the December 31 deadline for Aadhaar-linked e-Know Your Customer (e-KYC) norms for trading accounts. 

All demat account holders are required to link their accounts with Aadhaar by December 31. In case of failure to submit the documents within the prescribed time limit, the account would be suspended till the Aadhaar details are submitted by the customer.

Last week, the BSE asked trading and clearing members to report preparedness for furnishing the Aadhaar details of their clients. While trading members have to submit reports on their preparedness by August 23, clearing members and custodians have to do the same by August 25. In compliance with the amended Prevention of Money Laundering Act, banks have already sought Aadhaar details from their customers.

An official statement issued after the FSDC meeting, chaired by Finance Minister Arun Jaitley and attended by Reserve Bank of India Governor Urjit Patel, Finance Secretary Ashok Lavasa, among others, said: “The Council took note of the progress of Financial Sector Assessment Program for India, jointly conducted by the International Monetary Fund and the World Bank. The Council directed that the assessment report should be finalised by the end of this calendar year.”

The FSDC also discussed the planned Central KYC Registry (CKYCR) system and discussed the issues and suggestions related to its operationalisation. “The Council also deliberated on strengthening the regulation of the Credit Rating Agencies (CRAs),” it said.