No evidence to substantiate whistleblower complaint, says Infy; stock up 3%

Infosys campus
Infosys jumped up to 6.46 per cent to Rs 732.50 on the BSE on Monday after the company said there was "no supporting evidence" to substantiate the allegations levelled by the anonymous whistleblowers against it. 

At close, the stock stood at Rs 709 on the BSE, up 3 per cent against 0.34 per cent rise in the S&P BSE Sensex.

"With respect to the complaints, there is no prima facie evidence that the company has received until date to corroborate any of the allegations made," it said in a regulatory filing adding, "The complaints are still under investigation, the company is not in a position to determine the concreteness, credibility and materiality of the anonymous complaints". READ FILING HERE

In October, an anonymous whistleblower group called 'Ethical Employees' alleged that the company’s current management was taking 'unethical' steps to spur short-term revenue and profits.

Infosys surges nearly 5% today; should you buy the stock?

According to the whistleblower's complaint to US Securities and Exchange Commission and the board of Infosys, the Bengaluru-based firm's current CEO Salil Parekh was not taking necessary approvals before entering into large deals. "Several billion-dollar deals of last few quarters have nil margin," the letter said. "In large contracts like Verizon, Intel, joint ventures (JVs) in Japan, ABN AMRO acquisition, revenue recognition matters are forced," the letter added.

Post the development, the company issued a statement saying the board was committed to uphold highest standard of corporate governance and protect the interests of all stakeholders.

In response to the clarification sought by the exchanges, on why the information was not disclosed earlier, the company said, "unless an event / information is deemed ‘material’ under the LODR Regulations, or determined as ‘material’ by the company, the company has no obligation to disclose the same under Regulation 30 of the LODR Regulations. The complaints do not fall within the purview of deemed material events under the LODR Regulations."

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel