Infosys fell 0.84% to Rs 777.95 on reports that the Securities and Exchange Board of India (Sebi) is likely to probe whistleblower allegations of alleged financial irregularities at the company.
According to the media reports, Sebi is set to order a forensic audit into Infosys' books following whistleblowers' allegations that its top executives were involved in financial irregularities.On 21 October, an anonymous whistleblowers accused the chief executive officer (CEO) Salil Parekh and chief financial officer (CFO) Nilanjan Roy of "unethical practices".
On 22 October, the IT major's stock plummeted 16.21% on the BSE.
Infosys in its statement to the bourses on 2 November 2019 said that the anonymous complaints make certain allegations. There is no supporting evidence to substantiate the allegations. Two of the anonymous complaints were received on 30 September 2019. On 16 October 2019, the company was made aware of a letter that refers to 30 September 2019 complaint purportedly written to the office of whistleblower protection program, Washington D.C.
The anonymous complaints were placed before the audit committee and the non-executive members of the board, in accordance with the whistleblower practice of the company.
Also Read
The company's chairman, Nandan Nilekani, on 6 November 2019, stated that "these speculations are appalling and seem to be aimed at tarnishing the image of some of the most accomplished and respected individuals. I have deep regard for the life-long contribution of all our cofounders. They have built this institution and have served this company selflessly and even today, remain committed to the long-term success of Infosys."
After unveiling Q3 results in January 2020, Infosys announced conclusion of the independent investigation into allegations contained in the anonymous whistleblower complaints disclosed earlier. The Audit Committee determined that the allegations are substantially without merit. It concluded that no restatement of previously announced financial statements or other published financial information is warranted.
On the sidelines of a financial markets summit organised by the Confederation of Indian Industry, Ajay Tyagi, Chairman, Sebi, reportedly said, "The investors, if they want, can take comfort from Infosys statement but our probe is still on. This is all I can tell you."
Sebi is also investigating a huge build-up of derivatives positions in the stock before allegations of accounting malpractices were made public, the reports added.
In an exchange filing made during market hours today, the IT major said the company had received letters from regulatory authorities seeking information on the anonymous whistleblower investigation. The company continues to cooperate with regulatory authorities. The company has not received any request from Sebi to conduct further audits as reported by media on 23 January 2020.
On a consolidated basis, Infosys' net profit rose 10.9% to Rs 4,457 crore on 2% increase in revenues to Rs 23,092 crore in Q3 December 2019 over Q2 September 2019.
Infosys provides IT consulting and software services, including e-business, program management and supply chain solutions. The company targets businesses specializing in the insurance, banking, telecommunication and manufacturing sectors.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
