SEBI's Infosys Order: The First Real-World Test of the 'Frequent Communication' Connected-Person Test

Source: SEBI's Final Order dated January 31, 2025 in the matter of insider trading activities in the scrip of Infosys Limited, read directly from the published order.

Why this case matters

We've already covered, in a companion article, how the December 2024 amendment wrote "frequent communication" into the regulatory text of "connected person" (Regulation 2(1)(d)(i)), and how the SAT's earlier ruling in Kunal Kashyap v. SEBI anticipated exactly that test through inference. This order is the clearest example yet of the amendment being applied almost immediately — SEBI's Whole Time Member issued this Final Order on January 31, 2025, less than two months after the amendment took effect, and the order's own quotation of Regulation 2(1)(d)(i) already reflects the amended "frequent communications" language. If you want to see what "frequent communication" actually looks like as applied evidence, rather than as regulatory text, this is the case to read.

The facts

SEBI's surveillance system flagged trading in Infosys shares around the company's July 14, 2020 announcement of a strategic partnership with Vanguard. The investigation centered on two individuals: Ramit Chaudhri, Infosys's solution design head at the time (referred to in the order as Noticee No. 2), and Keyur Maniar, a senior executive at Wipro who was himself involved in Wipro's own competing efforts to win the Vanguard deal (Noticee No. 1). SEBI's investigation covered the period June 29, 2020 to September 27, 2021. A Show Cause Notice issued August 3, 2023 alleged violations of Section 12A(d) and (e) of the SEBI Act and Regulations 3(1), 3(2), and 4(1) of the PIT Regulations.

Notably, this case had already been through two rounds of SAT appeals before this Final Order: SEBI's original September 2021 interim order (restraining both Noticees and impounding ₹2.62 crore in alleged proceeds) was appealed, and SAT directed SEBI to hold a proper hearing before confirming it. A confirmatory order followed in December 2021; SAT set aside its specific directions in March 2022 while permitting the escrowed funds to stay impounded — expressly noting it was "satisfied that, prima facie, observation given by the WTM is correct," but declining to debar the parties before a full trial on the merits. The January 2025 order is that full trial's outcome.

How SEBI established Keyur Maniar as a "connected person"

This is the part worth reading closely. SEBI's evidence wasn't a large volume of contact — Call Detail Records showed just seven calls between Chaudhri and Maniar across roughly January to September 2020, several of them individually long (two consecutive calls on April 5, 2020 together ran about 45 minutes). Maniar's defense argued that five or six calls over several months doesn't meet any reasonable "frequency" threshold, and that nothing is unusual about former colleagues staying in touch.

What the order actually reasoned: the Whole Time Member didn't treat "frequency" as a pure call-count exercise. Instead, the finding rested on the combination of: a long-standing personal and professional relationship (the two were former colleagues in the same industry), the fact that both were simultaneously and directly involved in their respective companies' pursuit of the very same Vanguard deal, and calls of substantial individual duration occurring at moments that lined up with the deal's progress. The order states this combination made it "reasonable to infer" their calls involved discussion of their professional activities — and on a preponderance-of-probability standard, that was enough to establish Maniar as a connected person under the amended Regulation 2(1)(d)(i), and therefore an insider under Regulation 2(1)(g)(i).

What SEBI's reasoning signals: "frequent communication" is being read contextually, not numerically. Six calls is not frequent in the abstract, but six calls between two people who are former colleagues, both directly embedded in competing pursuit of the exact same corporate transaction, at moments coinciding with that transaction's progress, was frequent enough in that context. If you're assessing your own executives' external contacts for connected-person risk, don't anchor on a numerical threshold — anchor on whether the relationship and subject-matter proximity would make "they probably discussed it" a reasonable inference.

Chaudhri's liability without a trading violation

Ramit Chaudhri himself was not found liable for insider trading — he didn't trade. But the order treated his act of communicating the UPSI as, in its own words, an "egregious violation" of the PIT Regulations in its own right, warranting a penalty commensurate with that communication violation alone. This tracks the same pattern we saw in the Nucleus Software Exports enforcement roundup: SEBI penalizes tipping as seriously as trading, independent of whether the tipper personally profited.

The penalty

SEBI's directions: both Maniar and Chaudhri were restrained from the securities market for one year; Maniar was ordered to disgorge ₹2,60,70,624 in illegal gains plus 12% simple interest from July 17, 2020 (already sitting in an escrow account from the 2021 interim order); and both Maniar and Chaudhri were separately penalized ₹30,00,000 each under Section 15G of the SEBI Act — meaning the tipper who never traded paid the same monetary penalty as the trader who made ₹2.6 crore.

Bottom line for your compliance checklist

• When assessing connected-person risk for executives who maintain contact with counterparts at other companies, weigh relationship and subject-matter proximity over raw call/message counts — a handful of well-timed, long calls between people embedded in the same live transaction can be enough.
• Treat "we're competing for the same deal" as a specific, elevated risk factor for UPSI cross-contamination between former colleagues at rival companies, not just a general conflicts-of-interest concern.
• Communicating UPSI is independently and seriously penalized even where the recipient does all the trading and the communicator gains nothing directly — don't let internal training suggest that "I didn't profit" is a meaningful defense for whoever does the tipping.
• Remember that SEBI's evidentiary approach here (CDR analysis, timing correlation, relationship context) is now backed by regulatory text, not just inference — expect this fact pattern to recur in future enforcement, not remain a one-off.

This article summarizes a SEBI Final Order for general informational purposes and reflects our reading of that order as of the date of publication. It is not legal advice and should not be treated as a substitute for the primary order or advice from a qualified professional.