Infosys Shares Sink 16% After Whistleblowers Target CEO Over ‘Unethical Practices’
Infosys shares fell 10 per cent on Tuesday after CEO Salil Parekh and CFO Nilanjan Roy were accused of unethical practices by anonymous employees.
An employee walks past a signage board in the Infosys campus at the Electronics City IT district in Bangalore. (Reuters/File Photo)
Infosys shares plunged 16 per cent on Tuesday, marking their worst intraday drop in over six years, after CEO Salil Parekh and CFO Nilanjan Roy were accused of unethical practices by anonymous employees. The stock fell as much as 10 percent to Rs 691.10 per share on the NSE. Most brokerages said the allegations could lead to a lot of potential uncertainty for the company and could put the stock under pressure for the near term.
A few anonymous employees of global software vendor Infosys have accused Parekh and Roy of unethical practices for many quarters.
"Parekh and Roy have been resorting to unethical practices for many quarters, as evident from their e-mails and voice recordings of their conversations," said the complainants, who called themselves 'ethical employees' in a 2-page letter to the city-based IT behemoth's board of directors on September 20, a copy of which has been accessed by IANS.
When there was no response from the board to their letter, an unnamed whistleblower on behalf of the unethical employees on October 3 wrote to the US-based office of the Whistleblower Protection Programme, alleging willful mis-statement material accounting irregularities for (the) last two quarters (April-September).
In response, the company in a statement on Monday said the whistleblower complaint had been placed before the audit committee as per the company's practices.
"The complaint will be dealt with in accordance with the company's whistleblowers policy," the IT major said in a statement to IANS.
"In (the) last quarter (July-September), we were asked not to fully recognise costs like visa costs to improve profits. We have voice recordings of these conversations," claimed the letter.
Infosys said both the complaints were placed before the audit committee on October 10 and before the non-executive members of the board on October 11.
"These complaints are being dealt with in an objective manner. The undated whistleblower complaint largely deals with allegations relating to the CEO’s international travel to the US and Mumbai," the company said.
Infosys America Depository Shares declined 12.11 percent to close at $9.29 per share on the New York Stock Exchange on Monday.
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