Here's how Infosys employees shared insider information that turned a chunky profit of ₹3 crore

• The Securities and Exchange Board of India (SEBI) is pointing the finger at Infosys in a new case of insider trading.
• The securities watchdog has accused eight entities, including two employees of Infosys, of colluding to make a profit of ₹3 crore using insider information.
• Here’s how SEBI believes information was leaked, the market was manipulated, and a few bad actors thought they could get away with it.

UPDATE: Infosys told Business Insider that it plans to "extend full cooperation" to SEBI and launch an internal investigation of its own.

Infosys is once again caught in the tangles of insider trading. This time, the market regulator has found evidence that at least one employee helped a bunch of traders make a chunky profit to the tune of ₹3 crore by dealing in shares ahead of public announcements.

According to Securities and Exchange Board of India (SEBI), the evidence is ‘prima facie’, which means it’s legally sufficient to establish the case of insider trading unless disproved.

Name of the entities	Proceeds
Capital One Partners, Amit Bhutra, and Bharath C Jain	₹2.8 crore
Tesora Capital, Amit Bhutra, Manish Jain, and Ankush Bhutra	₹26.8 lakh
TOTAL	₹3 crore

As a result, eight entities ⁠— including two employees of the information technology (IT) behemoth ⁠— have been banned from the capital markets until further notice. The process enabling insider trading, as described in the interim order, has been explained below.

According to the securities watchdog, it wasn’t just one trade. Tesora Capital and Capital One Partners indulged in multiple futures and options from December 2019 to September 2020.

“Capital One and Tesora have the same repetitive pattern of trading in the scrip of Infosys during periods close to the announcement of financial results,” said SEBI’s order.

These are the people who SEBI has banned from trading in capital markets as part of its interim order in the insider trading case:

Name	Who is this?	SEBI’s allegations
Pranshu Bhutra	Senior corporate counsel at Infosys	Had access to price sensitive information that he shared with Amit Bhutra and transferred funds to a company called Mahrishi Alloy Private Limited.
Amit Bhutra	Working partner at Capital One Partners and Tesora	Amit is on the board of directors of Mahrishi. Mahrishi transferred funds to Amit’s mother.
Bharath C Jain	Working partner at Capital One Partners	Bharath procured UPSI from Amit. He is also one of the directors of Mahrishi.
Capital One Partners	-	Amit and Bharat are both working partners at Capital One Partners.
Tesora Capital	-	Amit, Ankush and Manish are all working partners at Tesora.
Manish C Jain	Working partner at Tesora	Brother of Bharath C Jain
Ankush Bhutra	Working partner at Tesora	Director at Mahrishi.
Venkata Subramaniam VV	Senior principal of corporate account group at Infosys	Designated person for the price sensitive information at Infosys. Alleged to have leaked the insider information to Pranshu.

Source: SEBI, * = unpublished price sensitive information (UPSI)

Phone calls, emails and the ‘fatherly’ connection
SEBI has gathered a plethora of evidence to support its allegations using email exchanges, telephonic records and banking transactions. And, it all starts with Pranshu Bhutra.

Amit Bhutra is listed as a director on the board of a company called Mahrishi Alloy Private limited, which claims to make steel products. And, so is Pranshu Bhutra’s father, Ram Bilas Bhutra. That’s where the trail begins.

So far, SEBI has been able to establish that Pranshu Bhutra — a senior employee at Infosys — shared insider information with Amit Bhutra. Information that the watchdog believes he likely obtained from another Infosys employee, Venkata Subramaniam VV.

In the month of June 2020 alone, Pranshu Bhutra transferred a combined amount of ₹1.1 crore to Mahrishi on four separate occasions.

Shortly thereafter, around ₹1 crore was transferred into the account of Shyama Devi Bhutra — Amit Bhutra’s mother. This means that not only does SEBI have reason to believe that Pranshu Bhutra shared insider information with other people, but also that he had money on the line.

Amit Bhutra used this money to take up positions in the market through Capital One Partners and Tesora Capital — both companies where he is a working partner. Bharath Jain, also a partner at Capital One, was also involved in the trades.

And, so was his brother, Manish Jain — who was a partner at Tesora alongside Amit Bhutra and a director at Mahrishi.

According to SEBI, all six individuals had access to insider information and used this information to take up positions in the market for a profit.

What happens next?
Business Insider contacted Infosys to ascertain if it would be taking an action against the named employees or if it plans to challenge SEBI’s order. "The company will extend full cooperation as required to SEBI on the matter. Additionally, as a result of the Order, an internal investigation is being initiated and appropriate action will be taken on conclusion of such investigation," the company told Business Insider in a statement.

The new set of allegations have come in less than a year after the IT major’s independent director, Bobby Parikh, was fined ₹2 lakh for ‘inadvertently’ trading with his wife’s account.

The year before that, in 2019, chief executive officer (CEO) Salil Parekh and chief financial officer (CFO) Nilanjan Roy were also accused of unethical accounting practices in a bid to boost revenue and profit. They were later cleared when an independent Infosys audit found no merit in the whistleblower allegations.

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