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Infosys Shares Plunge 15% On Whistleblower Letter


22 October 2019

OMMCOM NEWS


Mumbai: Infosys shares opened with severe losses and plunged 15 per cent on Tuesday, following a whistleblower complaint alleging "unethical practices" by the companys 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 September 20, 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."

 (IANS)