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.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Boy chokes to death after eating more than three pooris together

PWD, Google Maps officials booked in Bareilly bridge death case

WhatsApp, Gmail banned from use for transmission of official documents in Jammu and Kashmir

At 13 years, Vaibhav Suryavanshi becomes IPL’s youngest-ever player

Wanted to kill Ajmal Kasab who caused so much of pain, recalls 26/11 terror attack victim

Two retired revenue officials among four arrested in land grabbing case in Jammu

Kerala govt to revise manual for junior doctors, house surgeons

Related Articles More

Sensex reclaims 80k mark; Nifty surges over 1% after BJP-led Mahayuti’s win in Maharashtra

Rapid digital expansion to create over 1 lakh new jobs in fiber tech in India in next 5 years

Choose correct ITR to report foreign assets; 2 lakh such returns filed: CBDT official

Air India Express increases flight operations from northeast destinations

Mcap of 8 of top-10 most-valued domestic firms jumps Rs 1.55 lakh cr; HDFC Bank, TCS sparkle

MUST WATCH

Coconut Flower

Prakash Belawadi

Naxal Leader Vikram Gowda

Christmas Cake Fruit Mixing

DK Shivakumar


Latest Additions

Karnataka: BJP to begin official campaign on Waqf issue from December 4

Geethartha Chinthane 105: Shoka and Dukha are not same

Boy chokes to death after eating more than three pooris together

Internal divisions leave open question whether Gandhi’s vision will ever be fully realised in India: Bill Clinton

PWD, Google Maps officials booked in Bareilly bridge death case

Thanks for visiting Udayavani

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