Software services firm Infosys Technologies has imposed a fine on its chief executive officer S 'Kris' Gopalakrishnan and an independent director Jeffrey Sean Lehman for violating company rules.

The audit committee of Infosys [Get Quote] Technologies' board of directors has imposed a penalty of Rs 5 lakh (Rs 500,000) on Gopalakrishnan and a fine of $2,000 on Lehman as they failed to comply with the insider trading norms of the company, Infosys said in a notice to the US Securities and Exchange Commission.

According to the insider trading rules, a director, officer or other designated employees of the firm may buy or sell its securities only after prior notification and must notify within one business day following any change in his or her shareholding, it added.

The process requires the employee to apply to the firm's compliance officer for pre-clearance of each of such transaction and provide certain information and undertakings to the company through its compliance officer.

On December 24, 2007, Gopalakrishnan, the chief executive officer and managing director of Infosys Technologies inherited 12,800 equity shares from his mother.

However, he failed to notify the company within one business day following the change in his shareholding, which led to the imposition of Rs 5 lakh (Rs 500,000) penalty.

Gopalakrishnan was directed to donate the amount to a charitable organisation of his choice and he has made the donation as directed by the company's audit committee.

Besides, on December 7, 2007, Jeffrey Sean Lehman, an independent director of Infosys sold 900 American depositary shares (ADSs) of the company.

Though, Lehman notified the company of his intent to sell his ADSs, and also informed within one business day about the execution of the transaction, he failed to seek approval of the company's compliance officer and requisite information in advance of such sale, which were violation of the firm's insider trading rules, Infosys said.

Accordingly, the audit committee of the company's board of directors, on January 2, this year imposed a penalty of $2,000 upon Lehman and he was directed to donate it to a charitable organisation of his choice. Lehman has made the donation as directed by the company's audit committee.

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