MCA seeks information from Infosys on whistleblower complaints
1 min read . Updated: 29 Oct 2019, 10:40 AM IST
Premium- The corporate affairs ministry may also rope in accounting regulator NFRA at a later stage in case the authorities find any merit in the whistleblower allegations
- The complainants have raised questions about the revenue recognition by the company, which can have an impact on profit margins
New Delhi: The Ministry of Corporate Affairs has sought information from Infosys Ltd regarding the anonymous whistleblower complaints which have triggered an investigation by the US Securities and Exchange Commission (SEC).
The move is the first step that the ministry takes when it takes cognizance of complaints or material information warranting government attention about any company, said a person familiar with the development. It does not purport an investigation or inspection of books, which is a decision taken later on based on facts. The ministry has in the recent past sought information from several companies, including in cases where statutory auditors have quit their assignment.
The corporate affairs ministry may also rope in accounting regulator National Financial Reporting Authority (NFRA) at a later stage in case the authorities find any merit in the whistleblower allegations about the accounting practices followed by the company. The complainants have raised questions about the revenue recognition by the company, which can have an impact on profit margins.
An email sent to Infosys on Tuesday remained unanswered at the time of publishing.
The Economic Times reported on Tuesday that seeking information from companies under such circumstances is a usual practice.
Infosys had last week informed stock exchanges that it has placed the complaints before its audit committee, which has retained law firm Shardul Amarchand Mangaldas & Co. for an investigation. Capital market regulator Securities and Exchange Board of India or SEBI has already sought additional information from the company about the complaints. Infosys is also facing a class action lawsuit that has been filed against it in a federal court in the US based on the allegations in the complaints.
