The group of anonymous Infosys staff, who call themselves 'ethical employees', had accused senior management of 'unethical practices' to boost revenue and profit
A recent whistleblower complaint filed by Infosys' employees raised questions over corporate governance at the IT major.
Market regulator Securities and exchange Board of India (SEBI) and its US counterpart Securities and Exchange Commission (SEC) are investigating the matter.
The Corporate Affairs Ministry too has begun a probe into the allegations at India's second largest software services company.
The group of anonymous Infosys staff, who call themselves 'ethical employees', had accused senior management of 'unethical practices' to boost revenue and profit. The group had written to the Infosys' board and the SEC.
The complaint claims CEO Salil Parekh and CFO Nilanjan Roy pressurised the finance team to deliver higher profits.
Infosys' Audit Committee has begun its own investigation into the accusations, the company said in a statement last week.
Large investors are pressurising Infosys to finalise the probe report before the company releases its third quarter financial results in January, reports BusinessLine.
Here are other details about the whistleblower complaint and the developments that followed:
– The complaint accuses Parekh of bypassing audit and reviews of large deals.
– The whistleblower cites emails and video recordings as proof of the allegations. Infosys Chairman Nandan Nilekani said on October 22 the company has not received any such evidence so far.
– The ministry might ask the Serious Fraud Investigation Office (SFIO) or the Registrar of Companies to examine the complaint, sources told Moneycontrol.
– A class action lawsuit has been filed in the US against Infosys by three law firms - Bragar Eagel & Squire, The Rosen Law Firm and Howard G Smith.
– The share price of the company fell around 16 percent on October 22 after the whistleblower complaint was made public.
– If the allegations are proven right, then the board might decide to replace Parekh and Roy, analysts told Moneycontrol.
– SEBI is also looking into allegations of insider trading, according to a Mint report. The market regulator is investigating build up of derivatives before the whistleblower complaint was made public.– Ratings agency CRISIL has placed Infosys' long-term ratings on 'rating watch with developing implications'. Its rating currently stands at AAA.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.