Infosys starts probe into alleged 'unethical practices' by CEO; shares tank

This post was originally published on this site

https://i-invdn-com.akamaized.net/trkd-images/LYNXMPEF9L0AG_L.jpg

BENGALURU (Reuters) – Infosys Ltd (NS:) (N:) said on Tuesday it was investigating allegations of “unethical practices” by Chief Executive Officer Salil Parekh after receiving whistleblower complaints last month, sending its shares into a tailspin.

One of the complaints “largely deals with allegations relating to the CEO’s international travel to the U.S. and Mumbai,” Infosys Chairman Nandan Nilekani said in a statement. (https://www.bseindia.com/xml-data/corpfiling/AttachLive/fb1ef250-3c47-4861-b712-a40683253e43.pdf)

Parekh did not respond to Reuters’ request for comment.

Infosys shares plunged 16% on Tuesday, marking their worst intraday drop in over six years.

The allegations come just two years after India’s No. 2 software services firm endured a shake up that saw its top boss Vishal Sikka leave the company.

The Economic Times had reported on Monday that an anonymous group sent letters to Infosys’ board and the U.S. Securities and Exchange Commission alleging that the company was taking “unethical” steps to boost short-term revenue and profit. (https://economictimes.indiatimes.com/tech/ites/whistleblower-accuses-infosys-of-unethical-practices-to-boost-nos/articleshow/71679710.cms)

The group alleged that Parekh was bypassing reviews and approvals for large deals, the report added.

Reuters was not able to independently review the letters.

Infosys said it placed the complaints received in September before the audit committee on Oct. 10, and before the non-executive members of the board on Oct. 11.

The complaints are being dealt with in an objective manner, with the CEO and Chief Financial Officer Nilanjan Roy recused from the matter, it added.

The audit committee has retained the law firm of Shardul Amarchand Mangaldas & Co. to conduct an independent investigation, and the company’s board will take appropriate steps based on the outcome of the investigation, the company said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment