Infosys fines director for insider trading breach

Infosys has penalised Srinath Batni, a member of its Board, Rs 5 lakh, for his failure to timely notify Infosys of the sale of 10,000 equity shares of Infosys. According to the company it was a technical violation of the insider trading rules, which are a part of the company's code of conduct.

According to Infosys, on August 14, 2006, Srinath Batni, an executive director of the company, sold 10,000 equity shares of the company.

Pursuant to the terms of the company's insider trading rules, a director, officer or certain other designated employees of the company may buy or sell the company's equity shares only after prior notification to the company, may only buy or sell such equity shares during an open trading window, and must notify the company within one working day following the execution of such transaction.

Infosys further added that Batni notified the company of his intent to sell his equity shares and sold such equity shares during an open trading window. "However, Batni inadvertently failed to notify the company about the sale of the equity shares within one working day after the transaction, which was a violation of the company's insider trading rules. Batni notified the company of his sale of 10,000 equity shares on August 23, 2006," Infosys said in a statement.

The audit committee of Infosys' board of directors, which is responsible for review of company management's monitoring of compliance with the company's standards of business conduct, determined that Batni's failure to timely notify the company of the sale of equity shares was a technical violation of the insider trading rules, which forms a part of the company's code of conduct, and therefore imposed on Batni a penalty of Rs 5 lakh, which Batni has been directed to pay to a charity.