At Infosys, it is always ethics first
Infosys fines its CEO for breaking company rule
23 Jan, 2008, 0139 hrs IST, TNN as reported at Infosys fines its CEO for breaking company rule- Corporate Trends-News By Company-News-The Economic Times
Infosys is not only an IT bellwether, it's also an ethical bellwether. The company, in perhaps the first instance in India, has fined its CEO Kris Gopalakrishnan for a technical violation of its insider trading rules.
The fine, Rs 5 lakh, would be donated to charity. Besides the CEO, an independent director, Jeffrey Lehman, also has been fined $2,000 for the same violation.
This is the third time that Infosys has punished a member of its top brass. Earlier, it had imposed a penalty on its director Srinath Batni.
In a notice to the US SEC, Infosys said Mr Gopalakrishnan had inherited 12,800 equity shares from his mother on December 24, 2007 but had inadvertently failed to notify the company within one business day after the change in his shareholding.
This, according to the company, constituted a violation of its insider trading rules.
But Infosysâ€™ audit committee believed that Mr Gopalakrishnan had no intention of contravening the rules and imposed the penalty of Rs 5 lakh and directed him to donate the amount to a charitable organisation of his choice. Mr Gopalakrishnan has made the donation.
Mr Lehman was also imposed a penalty of $2,000 for failure to correctly follow the procedure on sale of shares and that amount, too, has been given to charity.
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