Was there Insider Trading in Infosys? Sebi smells fishy!!
It was sudden rush at Infosys counter on the Monday morning in the stock market. The scrip started falling down and down. The allegations of by some top employees at the IT Bell weather Infosys was lodged by some employees and surfaced on 21st October. The US markets also took cognizance of the Infosys saga as the regulator in US has also taken up. The ADRs also took a beating.
But the issue is SEBI smells a rotten rat at the whole saga. Was there an insider trading in the Infosys counter is the question that surfaces now.
While SEBI publicly said it will wait for internal audit committee, it is learnt by THE STREAM that a suo motu case is being planned. As the PUT Options sows an unusual surge.
The ‘put options’ —a stock market contract that provides the right to sell a share at a pre-set price at a certain point in the future—on Infosys stock were not fully transparent. It is reported that the Put Options positions were taken just before the letter from certain sections of whistle blowers has surfaced.
The Put Options were taken with 1.8 million shares at a strike price of 740 on 18 October, when the scrip closed at 767.75. It was just 2 days before thethe so called ethical whistle blowers letter surfaced on 21st.
When trading resumed on Tuesday, Infosys crashed by about 16% to Rs.643 per share. This means that the put options position holders could have made a neat profit of about Rs. 95 /- plus per share. But it is still unclear whether the contractual obligation has been exercised or not. The size of the shares in Put option is
Is it normal transaction or anything fishy is involved. Legally when the share is falling anybody can have the put option. But when the company ahs given a positive guidance going forward, the need for having so large – 1.8 million shares, as Put option arouses suspicion.
Apart from the issues of internal relations between employees and the Companay management, this issue of insider trading also is making news….!
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