Synopsis of the Story
Capital markets regulator SEBI (Securities and Exchange Board of India) has banned an Infosys employee along with an employee of Wipro, on charges of insider trading in the Infosys scrip. In the order earlier this week, SEBI noted that Ramit Chaudhri, Solution Design Head at Infosys and Keyur Maniar of Wipro earned Rs 2.6 crore from insider trading in the Infosys stock after the company announced a strategic partnership with Vanguard in July last year. Between July 10 and July 31 last year, Infosys share price soared nearly 20% higher.
The markets regulator has also asked the two — Ramit Chaudhri of Infosys and Keyur Maniar of Wipro — to disgorge illegal gains of about Rs 2.6 crore made during July 2020. A detailed investigation is ongoing, Sebi said in the report. Sebi’s investigations showed Chaudhri, who was in the Infosys team that worked on the Vanguard deal, told Maniar about the expected deal win.
The latter took position in Infosys contracts in the F&O segment just days before the final announcement on July 14, 2020. Maniar started trading positions in Infosys contracts on July 8 and, within 10 days, made a profit of Rs 2.6 crore. This was possible since Infosys’s stock price gained over 6% on news of its Vanguard deal win.
Sebi’s whole-time member Madhabi Puri Buch headed the investigation. The probe found that Chaudhri had worked in Wipro and that’s how he knew Maniar. The call records of the two also showed that on July 8, they had a long conversation, and within seven minutes after this call ended, Maniar put his first trade in Infosys contracts.
It also found that he started squaring off his positions from July 15, the day after the Vanguard deal was announced. Chaudhri and Maniar “are restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever until further orders”, Sebi noted in the report. It also ordered freezing of bank accounts of Chaudhri and Maniar to the extent of about Rs 2.6 crore.
The two have also been directed “to open an escrow account with a scheduled bank, jointly and severally and deposit the…proceeds generated from the prima facie insider trading”. Sebi also gave the two people 21 days to present their side of the case to the investigators.