Infosys Ltd Falls After Whistleblower Complaints

Shares of Infosys Ltd fell almost 16% in early market trading on Monday after the Indian company said that it had received whistleblower complaints.

The complaints alleged “unethical practices” by the company’s executives. According to reports, an anonymous group that calls itself “ethical employees” wrote on the Infosys Board as well as to the US Securities & Exchange Commission. They have claimed that they have emails and voice recordings to substantiate their claims.

“The whistleblower complaint has been placed before the audit committee as per the company’s practice and will be dealt with in accordance with the company’s whistleblowers policy,” Infosys said in a statement.

According to the group, the company was taking “unethical” steps to boost short-term revenue and profit.
The group had alleged that Chief Executive Officer Salil Parekh was bypassing reviews and approvals for large deals, according to an Economic Times report.

“In large contracts like Verizon, Intel, JVs in Japan, ABN AMRO acquisition, revenue recognition matters are forced, which are not as per accounting standards,” the ET report said.

“(The complaints) 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,” Infosys said in a filing.

Disclaimer: We have no position in Infosys Ltd ADR (NYSE: INFY) and have not been compensated for this article.