Home >Companies >News >Infosys US-listed shares plunge after whistleblower complaints
Salil Parekh, chief executive officer of Infosys (Photo: Bloomberg)
Salil Parekh, chief executive officer of Infosys (Photo: Bloomberg)

Infosys US-listed shares plunge after whistleblower complaints

  • The company has been accused of taking unethical steps to increase short-term revenue and profits
  • An anonymous group alleged that CEO Salil Parekh was bypassing reviews and approvals for large deals

Bengaluru: US-listed shares of Infosys Ltd fell nearly 12% on Nasdaq during early trading on Monday after the Indian software services exporter said it had received whistleblower complaints alleging "unethical practices" by the company's executives.

The company issued a statement after The Economic Times reported that an anonymous group sent letters to Infosys' board and the U.S. Securities and Exchange Commission alleging that the company was taking "unethical" steps to boost short-term revenue and profit.

According to reports, an anonymous group that calls itself "ethical employees" have written to the Infosys Board as well as American regulator US Securities and Exchange Commission with the allegations. They have claimed that they have emails and voice recordings to substantiate the same.

The group alleged that Chief Executive Officer Salil Parekh was bypassing reviews and approvals for large deals, the ET report said.

"In large contracts like Verizon, Intel, JVs in Japan, ABN AMRO acquisition, revenue recognition matters are forced, which are not as per accounting standards," the report said, citing cited the letters.

Reuters was not able to independently review the letters.

The complaints follow a strong quarterly show by Infosys, which raised the lower end of its annual revenue forecast on upbeat demand for its digital services from Western clients.

"(The complaints) have been placed before the audit committee as per the company's practice and will be dealt with in accordance with the company's whistleblower policy," Infosys said in a filing.

ADRs of Infosys were down 15.7% at $8.91 in premarket trading on the New York Stock Exchange. Indian markets were closed on Monday for a holiday.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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