While Mathews, chief financial officer of Infosys BPO, was sacked for failing to comply with the company's code of conduct, the unit's chief executive officer Gautam Thakkar quit on "moral grounds" and would leave the company by month end.
Infosys is reportedly sacking a few other senior executives for the irregularities which came to light during an internal audit.
While Apple did not immediately respond to an email sent for comment, Infosys said the "financial irregularities are not material in nature" and it has taken "disciplinary action" against the employees involved.
Apple outsources application development and maintenance work to Indian IT services providers and the contract is tipped to be in the range of USD 100-500 million.
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"Mathews was sacked as he did not report the issue of over-billing of the back-end services being provided to Apple. He also failed to act swiftly on the charge," an industry insider said on conditions of anonymity.
Another source said the "irregularities" came out during an audit exercise earlier this year.
When contacted, a Infosys spokesperson said: "The financial irregularities are not material in nature and the company has already made required disclosures. The company has taken disciplinary action against the employees involved".
The company, however, declined to comment further on client specific matters or on the investigation as they are "confidential in nature".
"It is a brave step from Infosys' side to come out and talk about the fraud going on internally in the company. It showcases Infosys' culture of 'no-nonsense' when it comes to their customers," Greyhound Research CEO Sanchit Vir Gogia said.