Biocon Chairperson Kiran Mazumdar Shaw Settles Alleged Infosys Insider Trading Case By Paying Settlement Charge

Biocon chairperson Kiran Mazumdar Shaw has settled a case of alleged delay in making disclosure regarding a change in her shareholding in Infosys by paying more than Rs 3 lakh as settlement charge, according to an order passed by the Securities & Exchange Board of India (SEBI).

Incidentally, the Biocon chairperson also happens to be a lead independent director of Infosys was alleged to have violated provisions of Prohibition of Insider Trading (PIT) regulations.

Earlier, a SEBI examination of the matter had revealed that Mazumdar Shaw had delayed making the requisite disclosures about the change in her shareholding in Infosys.

However, before proceeding further and initiating proceedings against her, SEBI sent her a notice of settlement, intimating that proceedings could be settled and disposed of by filing an application settlement mechanism along with remittance of a settlement amount of more than Rs 3.01 lakh.

Mazumdar Shaw accepted SEBI’s settlement offer after which she filed a settlement application without admitting or denying the default as well as remitted Rs 3,01,758 in September 2019.

Accordingly, a SEBI order disposed of any proceedings which could have been initiated for defaults.

As per the SEBI order, enforcement actions including commencing proceedings against Mazumdar Shaw could be taken if any representation made by the applicant is subsequently discovered to be untrue.

In this connection, it may be recalled that in February, Infosys had stated that Mazumdar Shaw had inadvertently sold 1,600 shares of the company without obtaining pre-clearance of trade.

Later, a review by the audit committee of Infosys board of directors determined that there was a violation of the company’s insider trading policy and PIT norms, due to which a penalty of Rs 9.5 lakh was imposed on her.