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Last Updated : Oct 22, 2019 06:50 PM IST | Source: Moneycontrol.com

Infosys-whistleblower saga: IT firm will have to rely on SEC

Infosys will have to rely heavily on the US capital market regulator for a complete picture of the issues surrounding the complaint by whistleblowers against its CEO Salil Parekh and finance chief Nilanjan Roy.

 
 
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Although Infosys has retained the law firm Shardul Amarchand Mangaldas & Co to conduct an investigation into the allegations against the senior executives, it is only the whistleblower office of the US Securities and Exchange Commission which has access to the evidence supposedly in the hands of the whistleblowers.

What this implies, according to executives who are aware of the company's thinking, is that Infosys will willy-nilly end up relying on SEC before determining the final fate of those involved in this affair.

The whistleblowers claim to have in their possession e-mails and voice recordings which purport to show that Parekh and Roy violated corporate governance norms and window-dressed accounts.

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"As of now, it looks nearly impossible for Infosys or the investigation committee to access the evidence. It will have to rely on the outcome of the SEC," said an executive familiar with the ongoing talks surrounding the latest whistleblower complaint against the company.

In the main, these allegations include: --Insistence that visa costs not be recognised. This move, apparently, was opposed by the auditors--Instructions by the CEO and CFO not to share key information with the board and auditors -- Unauthorised personal claims by Parekh -- Pressure to change investment policy and accounting without informing the board or the auditors Infosys, whose American Depositary Shares are listed on the New York Stock Exchange, more or less acknowledged as much in a statement today when it said: 'Although we have not been provided any of the emails or voice recordings, we will ensure that the generalized allegations are investigated to the fullest extent.'

The whistleblowers have told SEC that they are not sharing the e-mails and recordings with the company for fear that their identity would be exposed.

The SEC's Whistleblower Protection Program provides monetary rewards for individuals who report violations of US securities laws. Whistleblowers are eligible for rewards between 10 percent and 30 percent of monetary sanctions that exceed $1 million.

Infosys shares crashed by 12.1 percent to $9.29 on the NYSE on October 21. On the National Stock Exchange, they skidded by 16.6 percent to Rs 640.

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First Published on Oct 22, 2019 06:50 pm
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