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Infosys Shares Nosedive 15 Per Cent As Whistleblower Letter Alleging Unethical Practices By Top Officials Surfaces
Infosys Office. (Photo Credit: Zorror2212/Wikimedia Commons)
Infosys shares opened with severe losses and plunged 15 per cent on Tuesday (22 October), following a whistleblower complaint alleging "unethical practices" by the company's Chief Executive Officer (CEO) Salil Parekh and Chief Financial Officer (CFO) Nilanjan Roy.
Infosys stocks were trading over 13 per cent lower at Rs 667.40 a share after falling as much as Rs 645.35 apiece. Infosys shares on the BSE closed at Rs 767.75 a share on Friday.
An anonymous letter by Infosys employees has alleged that in the quarter under review of fiscal 2019-20, the management put immense pressure on them to not recognise reversals of $50 million (Rs 353 crore) of upfront payment in FDR contract, as it will slash profits for the quarter and negatively affect the company's stock price.
"Parekh and Roy have been resorting to unethical practices for many quarters, as evident from their e-mails and voice recordings of their conversations," said the complainants, who called themselves 'ethical employees' in a 2-page letter to the city-based IT behemoth's board of directors on 20 September, a copy of which has been accessed by IANS.
"Critical information is hidden from the auditors and board. In large contracts like Verizon, Intel and JVs (Joint Ventures) in Japan, ABN Amro acquisition, revenue recognition matters are forced, which is not as per the accounting standards," said the letter.
In a statement to the exchanges, Infosys said: "These (letter) 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."
(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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