No prima facie evidence in whistle-blower plaint: Infosys

Andrew Cummings
November 6, 2019

"With respect to the anonymous complaints, there is no prima facie evidence that the company has received until date to corroborate any of the allegations made", Infosys said in a letter dated November 2 to the National Stock Exchange (NSE).

"With respect to the anonymous complaints, there is no prima facie evidence that the company has received until date to corroborate any of the allegations made". Infosys said it was not obligated to disclose the complaints since the allegations were not deemed "material" under Indian rules.

Information technology major Infosys on Monday said there was no prima facie evidence in the complaints made by anonymous whistle-blowers against the management. Infosys has since hired law firm Shardul Amarchand Mangaldas and Co.to look into the allegations.


According to reports, the complaint by a group that calls itself "ethical employees" had alleged chief executive officer Salil Parekh and chief financial officer Nilanjan Roy were indulging in "unethical practices" to boost short-term revenue and profits.

Infosys's disclosures about the complaints came barely a week after it reported its financial results on October 14.

This comes on the back of two whistleblower complaints that the company received on September 30 and which were placed before the audit committee on October 10. It is also being investigated by the U.S. Securities Exchange Commission, while a class action lawsuit has been filed against it in the U.S.


"The only information one can glean from this is the company justifying why they felt it not material to make disclosure to the stock exchange", the analyst added.

Infosys shares, which had plunged 16 per cent when details about the complaints surfaced on October 21, gained 3 per cent to Rs 709 on the BSE on Monday after the company's clarification.

Earlier the IT companies shares seen a decline after the Indian software services exporter had announced that it had received whistleblower complaints against company's executives, alleging "unethical practices" last month. Infosys founder N.R. Narayana Murthy questioned Sikka's spending style, his pay rise, and the rationale behind a bloated severance pay to a former CFO, saying "the company is using such payments as hush money to hide something".


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