Sebi Lifts Curbs on 16 Entities in Infosys Insider Trading Case

Sebi on Monday lifted restrictions imposed on 16 entities, including some former employees of Infosys, in a case pertaining to alleged insider trading activities in IT major shares.

The regulator also directed that the prohibition slapped on six entities -- Amit Bhutra, Bharath C Jain, Capital One Partners, Tesora Capital, Manish C Jain and Ankush Bhutra -- through the interim order, along with the confirmatory order, will stand vacated with immediate effect, bringing an end to the matter.

"I deem it fit to vacate the directions issued vide the interim order read with confirmatory order against noticees 2 to 7 and dispose of instant proceedings against all the noticees.

"The interim order and the Confirmatory Order in respect of the noticees have already been quashed by the SAT vide its order dated April 25, 2022," Sebi's whole-time member Ashwani Bhatia said in the 57-page final order.

The case originated after Sebi identified suspicious trading patterns around the financial results announcements of Infosys for four quarters, covering from December 2019 to September 2020.

The preliminary investigation pointed to violations of the regulator's insider trading norms by various entities.

In its interim order in May 2021, Sebi imposed restrictions on several individuals and entities, including Pranshu Bhutra, Amit Bhutra, Bharath Jain, and other entities, prohibiting them from securities markets.

Pranshu Bhutra was senior corporate counsel of Infosys and Venkata Subramaniam VV was senior principal, corporate accounting group, Infosys, while Capital One and Tesora Capital were the two partnership entities.

Thereafter, Sebi issued a show cause notice to Bhutra alleged to have access to unpublished price-sensitive information (UPSI) because of his frequent interactions with Subramaniyam and Sunil Kumar Dareshwar.

It was also alleged that Pranshu Bhutra had passed the UPSI to Amit Bhutra who then passed this information to the other noticees.

Sebi's WTM Bhatia said the material available on record is not sufficient for sustaining the allegation that Venkat had communicated the UPSI to Pranshu.

"Once the allegations against Pranshu that he had access to UPSI fail, the allegation that Pranshu had communicated the UPSI to Ankit Bhutra cannot be sustained. As a consequence of the same, the allegations against all other noticees do not stand," he added.

In addition, the markets regulator noted that the orders against Noticees 1 and 8 -- Pranshu Bhutra and Venkata Subramaniyam VV -- had already been quashed by the Securities Appellate Tribunal (SAT) on April 25, 2022.

Further, the regulator acknowledged the SAT's decision and included this in its final ruling and directed that any funds impounded from Noticees 2 to 7, which were deposited in escrow accounts pursuant to the interim orders, should be released along with any accrued interest.

With the disposal of the case, no further actions or penalties will be imposed on any of the 16 noticees.