Udayavni Special

Infosys shares tank as probe begins in alleged ‘unethical practices’ by CEO, CFO


Team Udayavani, Oct 22, 2019, 5:02 PM IST

New Delhi: IT services giant Infosys Ltd on Tuesday said it is investigating claims by anonymous whistleblowers accusing CEO Salil Parekh of “unethical practices” to shore up profits through irregular accounting, sending its shares to their worst intraday fall in over six years.

Chairman and co-founder Nandan Nilekani pledged a full probe, saying the complaint had been placed before the audit committee on October 10 and before the non-executive members of the board the next day.

A September 20 letter, signed by “Ethical Employees”, had alleged that Parikh as well as Chief Financial Officer Nilanjan Roy engaged in forced revenue recognition from large contracts not adhering to accounting standards.

Infosys shares plunged over 16 per cent, the most since April 2013. They closed at Rs 639.85 on the BSE, down Rs 127.90 over the previous trading day close.

The letter addressed to the board claimed that recent big deal wins carried negligible margins and that Roy directed certain people to make wrong assumptions to show margins.

The latest allegations came just two years after Infosys endured an internal turmoil that saw its then head Vishal Sikka resigning from the company.

In a statement to stock exchanges, Nilekani said the audit committee has begun consultation with independent internal auditors EY and has retained law firm Shardul Amarchand Mangaldas & Co to conduct an independent investigation.

He said one board member had received two anonymous complaints on September 30, 2019 – one dated September 20, 2019, titled “Disturbing unethical practices” and an undated note with the title “Whistleblower Complaint”.

He said both had been placed before the audit committee on October 10, 2019, and before the non-executive members of the board the following day.

“Post the board meeting of October 11, 2019, the audit committee began consultation with the independent internal auditors (Ernst & Young) on terms of reference for their prima facie investigation. The audit committee has now retained the law firm of Shardul Amarchand Mangaldas & Co (October 21, 2019) to conduct an independent investigation,” Nilekani noted in his statement.

The board, in consultation with the audit committee, will take such steps as may be appropriate based on the outcome of the investigation, he added.

Top News

Udupi: Highest single day spike of 73 new COVID-19 cases

70% of people want Modi to be PM for another term: BSY

Violence against healthcare personnel unacceptable: PM

PM Modi praises state govt’s efforts in handling COVID crisis

Govt’s locust control policy focuses on chemical spray alone: Farm expert

Swarm has diverted to other states; no need to be afraid of locust attack: B C Patil

China says situation at border with India ‘stable and controllable

Related Articles More

Centre launches micro-credit scheme to provide loans to street vendors

Unlock 1.0: Hotel stocks spike up as Govt lifts curbs on operations from June 8

Mumbai based company,BDR signs pact with Cipla for remdesivir

HC restrains firm from using ‘Devtol’ says it infringes ‘Dettol’ trademark

Discoms can now buy power on exchanges just an hour before delivery

MUST WATCH

Tragedy and chaos: Former MIA director recalls Mangalore Air Crash

Lockdown relaxation: Long queues outside liquor stores in Mangaluru

Indian Coast Guard thank Covid-19 warriors

#WeFeed – Feeding stray animals during lockdown!

Mysuru-origin doctor honoured with parade for her service in treating COVID-19 patients in US

Latest Additions

Centre launches micro-credit scheme to provide loans to street vendors

14 fresh cases in Kasargod; COVID-19 tally touches 1326 in Kerala

Modi is an “indispensable” leader: Shiv sena

12 dead, 21 injured as van with migrant workers from India collides with truck in Nepal

Unlock 1.0: Hotel stocks spike up as Govt lifts curbs on operations from June 8

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.