SEC begins probe against Infosys in whistleblower complaints

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The US Securities and Exchange Commission (SEC) has started a probe into whistleblower complaints against the company, Infosys said on October 24.

“The company has been in touch with the Securities and Exchange Commission (SEC) regarding the anonymous whistleblower complaints (anonymous complaints) and has learnt that the SEC has initiated an investigation into this matter,” the IT giant said in statement to the BSE.

The company will cooperate with the SEC’s investigation, it added.

The statement also added that India’s market regulator the Securities and Exchange Board of India (SEBI) had sought additional information about the complaints, which the company would provide.

“The company is also aware of a securities class action lawsuit that has been filed against the company in federal court in the United States based on the generalized allegations in the anonymous complaints. The company intends to defend itself vigorously in such a lawsuit,” the statement read.

The complaints, according to media reports, allege irregular practices by CEO Salil Parekh and CFO Nilanjan Roy to boost revenue in short-term.

The letters were written by a group of Infosys staffers, who call themselves “ethical employees”.

In response to the clarification on the whistleblower allegations that the BSE sought on October 23, chairman Nandan Nilekani said, "While dealing with these complaints, the Company evaluates the requirements of various regulations including disclosures under Regulation 30 of SEBI (LODR) Regulations, 2015, as amended (LODR Regulations).

“As disclosed in the Company's stock exchange filings made on October 22, 2019, the anonymous whistleblower complaints have been placed before the audit committee who has retained the law firm of Shardul Amarchand Mangaldas & Co. to conduct an independent investigation. Before conclusion of the investigation of the generalized allegations in the complaints, a disclosure under Regulation 30 of LODR Regulations was not required. The disclosure made on October 22, 2019 was to respond to multiple media inquiries and reports. The company undertakes to continue making timely disclosures as required under Regulation 30 of LODR Regulations."